Table 1_Managerial short-termism, ESG decoupling, and digital signaling: environmental governance evidence from China.docx

However, whether reported ESG information reflects underlying environmental performance remains uncertain in transitional institutional environments. Using a panel of Chinese A-share listed firms from 2009 to 2024, this study examines the association between managerial short-termism and ESG disclosure–performance divergence, and further investigates whether observable digital investment conditions the risk consequences of such divergence.

ESG decoupling is measured as the gap between ESG disclosure intensity and verifiable environmental compliance outcomes. The results show that firms with stronger short-term managerial incentives are associated with greater ESG disclosure–performance divergence. ESG decoupling is also positively associated with corporate downside risk, and this association is more pronounced among firms with higher levels of observable digital investment.