ESG certification, green innovation, and firm value: A quasi-natural experiment based on SynTao Green Finance's ESG ratings: A pre-registered report

Xiao Bai, Wenyao Zhao and Geran Tian

Pacific-Basin Finance Journal, 2024, vol. 86, issue C

Abstract: Green technology improvements are vital for sustainable growth. This pre-registered study examines the impact of environmental, social and governance (ESG) certification on green innovation and firm value, utilizing the first release of ESG ratings by SynTao Green Finance as a quasi-natural experiment. We conceptualize ESG certification as an incremental disclosure of corporate information and an external evaluation by the market. Our investigation focuses on the effects of ESG certification on both the quantity and quality of green innovation. Specifically, we analyze the mechanisms underlying these effects, testing the financing constraint effect and market monitoring effect on the quantity of green innovation, as well as the management opportunism effect on the quality of green innovation. Additionally, we explore whether the increase in green innovation driven by ESG certification enhances firm value. Our conclusions may provide significant implications for firms aiming for green development and for emerging markets seeking to improve ESG disclosure regulations.

Keywords: ESG; Green innovation; Firm value; Financing constraint effect; Market monitoring effect; Management opportunism effect (search for similar items in EconPapers)
JEL-codes: G24 G34 O31 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:86:y:2024:i:c:s0927538x2400204x

DOI: 10.1016/j.pacfin.2024.102453

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