Environmental, Social and Corporate Governance (ESG) and Total Factor Productivity: The Mediating Role of Financing Constraints and R&D Investment

Haoming Ding, Wei Han and Zerui Wang ()
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Haoming Ding: The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea
Wei Han: The Graduate School of Management of Technology, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea
Zerui Wang: The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea

Sustainability, 2024, vol. 16, issue 21, 1-14

Abstract: In recent years, “environment, society and governance” (ESG) has attracted widespread attention. As an investment philosophy focused on long-term value creation and non-financial performance indicators, ESG addresses internal governance challenges and fosters high-quality economic and social development. This study uses panel data analysis of 9125 observations from 1305 eligible companies to examine the relationship between ESG ratings, financing constraints, corporate research and development (R&D), and total factor productivity (TFP). It focuses on heavily polluting enterprises listed on the Shanghai and Shenzhen A-shares from 2012 to 2022. The findings show that (1) ESG ratings significantly impact TFP for the better, and (2) financial limitations act as a go-between for the ESG ratings and TFP connection, and (3) corporate R&D also serves as a mediator between ESG ratings and TFP. These findings offer valuable insights for shaping corporate ESG strategies, driving green transformation, enhancing productivity, advancing sustainable development, and supporting high-level environmental protection.

Keywords: ESG ratings; total factor productivity; financing constraints; firm research and development (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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