How does local government fiscal pressure affect corporate ESG performance?

Qiang Ji and Song Nie

Finance Research Letters, 2024, vol. 64, issue C

Abstract: This paper explores how fiscal pressure affects the corporate Environmental, Social and Governance (ESG) performance. By investigating 720 Chinese listed corporates from 2011-2020, we find that fiscal pressure is negatively associated with the corporate ESG performance. The corporates with communist party branch, the corporates located in big cities and cities with strict environmental regulation and high marketization can better resist the negative effects of fiscal pressure on ESG performance. Furthermore, the study also reveals that fiscal pressure affects ESG performance through financial constraints and green innovation.

Keywords: Fiscal pressure; Government behavior; Corporate ESG performance; Green innovation; Financing constraints (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324005087

DOI: 10.1016/j.frl.2024.105478

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