AI-Driven Digital Transformation, ESG Governance, and Blockchain Accounting: Pathways to Sustainable Firm Performance

This study examines whether and how AIenabled digital transformation (AIDT) relates to firm performance in a large panel of China A-share companies from 2018 to 2024. A transparent, text-based AIDT index is constructed from annual reports and merged with standard financial data. Estimation uses firm- and year-fixed effects with standard errors clustered by firm. Across specifications, AIDT is positively and economically meaningfully associated with firm performance. When innovation capability is included, the AIDT coefficient attenuates yet remains statistically significant, consistent with partial mediation through innovation. Robustness checks using an alternative AIDT construction and a one-year lag within the same window support measurement stability and temporal persistence. Heterogeneity analyses indicate stronger associations in eastern provinces and among larger firms. Taken together, the evidence suggests that AIDT relates to improved performance, in part through innovation, and clarifies when and for whom digital initiatives yield larger payoffs. The measures and design are transparent and replicable.