Abstract

The fundamental integration of corporate environmental responsibility (CER) driven by the increasing irre-versibility of climate change has been evolving but still is insufficient in emerging economies. Hence, our ob-jectives are to know the combinational effect of the factors to determine a firm's high allocation of monetary resources to environmental issues and understand the role of the digital transformation process in the era of Industry 4.0 and its interaction with the internal-external variables proposed. In this sense, we conducted a comparative analysis of two representative emerging economies in Latin America, considering the external context of the companies (countries' competitiveness levels). We perform a fuzzy-set qualitative comparative analysis (fsQCA) to focus on multiple conjectural causations that lead to the same outcome. The results show that small firms in a less competitive country carry out high environmental expenditures based on value creation rather than the regulatory environment. On the other hand, large firms in a highly competitive country carry out high environmental commitments to enhance legitimacy and improve external image. Finally, we found that the relationship between digitalization adoption and corporate environmental responsibility depends on a country's informality level. Thus, countries with high informality cannot successfully impact digitization and generate sustainable solutions.