How ESG enhances corporate competitiveness: Mechanisms and Evidence

Kejin Ni, Rui Zhang, Lei Tan and Xiaobing Lai

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: This paper uses data from Chinese A-share listed companies (2007∼2021) to investigate the impact of ESG performance on corporate competitiveness and its mechanism. Using a fixed-effects model, this paper finds that ESG performance significantly enhances corporate competitiveness. ESG exerts its influence by reducing financing constraints, enhancing corporate reputation, reducing agency conflicts, and promoting innovation. Heterogeneity analysis finds that firm size, financing convenience, local fiscal spending on science, and management ownership moderate this effect. This study enriches research on the drivers of corporate competitiveness and provides empirical support for long-term value investing in ESG in emerging markets.

Keywords: ESG; Corporate competitiveness; Financing constraints; Corporate reputation; Agency conflicts; Technological innovation (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012789

DOI: 10.1016/j.frl.2024.106249

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