ESG Ratings and Green Innovation

Yu Lu, Yaqi Zhao, Lian Liu () and Guoying Shi
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Yu Lu: Business School, Beijing Technology and Business University, Beijing 100048, China
Yaqi Zhao: Business School, Beijing Technology and Business University, Beijing 100048, China
Lian Liu: Business School, Beijing Technology and Business University, Beijing 100048, China
Guoying Shi: Business School, Beijing Technology and Business University, Beijing 100048, China

Sustainability, 2024, vol. 16, issue 24, 1-30

Abstract: This study examines the impact of ESG ratings on corporate green innovation, selecting A-share listed companies in China from 2012 to 2022 as the research sample. Using a multiple-time-point difference-in-differences model, we analyze how ESG ratings influence both the output and efficiency of green innovation. The findings reveal that ESG ratings significantly promote green innovation, particularly by encouraging companies to increase investments in environmental protection, social responsibility, and corporate governance. Additionally, ESG ratings facilitate green innovation by reducing financing pressures, increasing media attention, and mitigating managerial myopia, with the effects most pronounced in highly polluting industries and firms with weaker corporate governance structures. These results offer valuable insights for companies pursuing sustainable development and for policymakers aiming to foster green innovation.

Keywords: ESG ratings; corporate green innovation level; multiple-time-point difference-in-differences (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (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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