Does Information Transparency Moderate the Relationship Between ESG and Green Innovation? Empirical Evidence from China

Mengdi Qin and Eunmi Tatum Lee ()
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Mengdi Qin: Business and Economics, Sejong University, Seoul 05006, Republic of Korea
Eunmi Tatum Lee: Business and Economics, Sejong University, Seoul 05006, Republic of Korea

Sustainability, 2024, vol. 16, issue 23, 1-17

Abstract: The results regarding whether the relationship between environmental, social, and governance activities and green innovation is linear or non-linear are inconsistent. Therefore, by drawing on stakeholder theory and neoclassical perspective, we re-examined the relationship and con-firmed the non-linear relationship between environmental, social, and governance activities and green innovation, which constitutes the academic contribution of this paper. In particular, we investigated the moderating effect of information transparency on the relationship by constructing an index using five indicators from Chinese databases. By merging Chinese local databases, more than 3000 companies listed on the Shanghai and Shenzhen Stock Exchanges in China were analyzed, with the fixed-effect estimation methods confirming a U-shaped relationship. The results further showed that information transparency strengthens the U-shaped relationship between environmental, social, and governance activities and green innovation. Our study provides an important implication that a high level of information transparency enhances this relationship in emerging economies such as China, where information transparency is relatively less developed.

Keywords: ESG; green innovation; information transparency; U-shaped relationship; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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