How does digital industry clustering enhance enterprise ESG performance? Evidence from China’s major urban agglomerations

Digital industries are rapidly clustering globally, reshaping corporate environmental, social, and governance (ESG) practices, yet mechanisms behind this link remain unclear. Using panel data of 994 Chinese listed firms (2013–2022), this study explores how digital industry clustering (DIC) affects ESG performance. Results show: (1) digital industries cluster toward core metropolitan areas, with only mild polycentric differentiation in the Yangtze River Delta (YRD); (2) DIC significantly boosts ESG performance, strongest in the Pearl River Delta, followed by Beijing–Tianjin–Hebei and Chengdu–Chongqing, weakest in the YRD; (3) DIC enhances ESG via economies of scale (reducing environmental costs), talent attraction (increasing employment), and knowledge spillovers (improving internal controls); (4) stronger effects appear in high-tech regions and industries, state-owned, large, market-leading, and customer-concentrated firms. This provides insights for improving ESG through DIC in urban agglomerations.