doi: 10.18178/joebm.2024.12.2.787
Does Corporate ESG Performance Improve Innovation Efficiency? Evidence from China’s Listed Companies
Xinzhe Wang
- Business School, Monash University, Melbourne, Australia
- Manuscript received March 26, 2024
- revised April 19, 2024
- accepted April 21, 2024
- published April 23, 2024
Abstract
We scrutinize the impact of Environmental, Social, and Governance (ESG) performance on corporate innovation efficiency. Utilizing panel data from China’s A-share listed companies spanning 2009 to 2020, our analysis reveals that firms exhibiting superior ESG performance are also marked by heightened innovation efficiency. More precisely, our findings indicate that exemplary ESG performance beneficially influ-ences corporate innovation efficiency. This positive impact is facilitated through the attraction of government subsidies, the alleviation of financing constraints, and the fortification of corporate governance. Furthermore, our results underscore that ceteris paribus, the advantageous impact is particularly pronounced in firms that are non-state-owned, large in scale, highly profitable, and situated in regions with advanced levels of marketization. Through this investigation, we provide novel insights into the ESG-innovation nexus and conduct a comprehensive evaluation of the mechanisms underpinning this relationship.
Keywords
- agency theory
- corporate innovation efficiency
- ESG performance
- information asymmetry
- sustainable finance
How to Cite
Xinzhe Wang, "Does Corporate ESG Performance Improve Innovation Efficiency? Evidence from China’s Listed Companies," Journal of Economics, Business and Management, vol. 12, no. 2, pp. 128-148, 2024. https://doi.org/10.18178/joebm.2024.12.2.787
Copyright & License
Copyright © 2024 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).