Will ESG disclosure affect the green innovation level of SMEs?

Junsong Bao and Liuyi Yang

Finance Research Letters, 2025, vol. 83, issue C

Abstract: This study explores the impact of environmental, social, and governance (ESG) disclosure on green innovation in SMEs, highlighting the moderating roles of digital transformation and executives’ green perception. Using a panel dataset and robust econometric techniques, the results indicate that ESG disclosure significantly fosters green innovation. Digital transformation amplifies this effect through technological integration, whereas executives’ green perception strengthens it via strategic alignment. Endogeneity corrections confirmed the robustness of the results. This study underscores the necessity of integrating structural enablers with managerial commitment to maximize ESG-driven innovation, offering practical insights for policymakers and business leaders.

Keywords: ESG disclosure; Green innovation; Digital transformation; Executives’ green perception; SMEs (search for similar items in EconPapers)
JEL-codes: L25 M14 O32 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009158

DOI: 10.1016/j.frl.2025.107656

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