ESG performance and green total factor productivity

Xiaoyan Ma, Aimin Zhou and Chuenyu Chi

Finance Research Letters, 2025, vol. 73, issue C

Abstract: Environmental, social, and governance (ESG) practices in the corporate sector have sparked debate over their effectiveness. However, the true impact of ESG initiatives on enhancing green total factor productivity (GTFP) in the real economy remains unclear. This study clarifies this relationship by examining data from China's A-share listed companies from 2009 to 2020. Using the super-efficiency slack-based measure (SBM) model and Global Malmquist–Luenberger index, we assess how ESG performance influences GTFP. Findings reveal that ESG efforts are crucial in enhancing GTFP, primarily by encouraging green innovation and reducing financing barriers. A detailed analysis indicates that ESG practices significantly advance green technology efficiency, while their impact on green technology progress is less pronounced. Among the ESG dimensions, governance is identified as the key driver of green transformation, the environmental component shows a delayed influence, and the social aspect appears to have no immediate impact on GTFP.

Keywords: ESG construction; Green total factor productivity; Green technological efficiency; Green technology progress (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016593

DOI: 10.1016/j.frl.2024.106630

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