How does ESG performance promote corporate green innovation?

Han Long, Gen-Fu Feng and Chun-Ping Chang ()
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Han Long: Xi’an Jiaotong University
Gen-Fu Feng: Xi’an Jiaotong University
Chun-Ping Chang: Shih Chien University

Economic Change and Restructuring, 2023, vol. 56, issue 4, No 28, 2889-2913

Abstract: Abstract How to enhance competitive advantage and turn green commitment into practice is a problem that corporates must face under sustainable development. This research examines the impact of environmental, social, and governance (ESG) performance on corporate green innovation and the role digital transformation plays in it. We use a panel fixed effects model for empirical analysis based on sample data of 1070 Chinese-listed corporates from 2011 to 2020. The empirical results show that better ESG performance leads to more acquisition of green innovation by corporates. This effect is more significant under the promotion of digital transformation. The role of ESG performance and digital transformation is markedly heterogeneous across different types of corporates. Among private corporates, technology-based corporates, and ecological corporates, the improvement of green innovation by ESG performance is more apparent, and the promotion effect of digital transformation is more significant. Our findings suggest that creating conditions for corporate ESG performance improvement and digital transformation at the macro level and enhancing corporates’ subjective willingness for sustainable development and digitalization at the micro level will enable them to develop their green innovation capabilities by leaps and bounds.

Keywords: Environmental; social; and governance; Green innovation; Digital transformation (search for similar items in EconPapers)
JEL-codes: M14 O31 Q55 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s10644-023-09536-2

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