ESG Rating Events, Financial Investment Behavior and Corporate Innovation

Chao Li, Shusong Ba, Kejia Ma, Yueling Xu, Wenli Huang and Niyuan Huang

Economic Analysis and Policy, 2023, vol. 77, issue C, 372-387

Abstract: The effectiveness of Environmental, Social and Governance (ESG) ratings has been widely discussed in academia and is linked to corporate financial performance. However, the underlying mechanism between ESG rating events and firm innovation in developing countries has not been effectively explored. Taking Chinese A-share non-financial listed companies from 2009 to 2020 as research samples, this paper empirically studies the mechanism of ESG rating events affecting corporate innovation of listed companies. The findings are as follows :(1) ESG performance and ESG rating events with high financial investment behavior can promote corporate innovation; (2) The industrial structure, the level of property rights protection and the level of regional financial development are the main external environmental factors affecting the previous conclusion; (3) Firm scale effect and capital reservoir effect are the main internal firm factors affecting the first conclusion.

Keywords: ESG; Financial investment behavior; Corporate innovation; External factor; Internal factor (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:77:y:2023:i:c:p:372-387

DOI: 10.1016/j.eap.2022.11.013

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