Is ESG improvement an efficient green solution for resource curse vulnerability of enterprise management? Evidence from fossil fuels extraction industry

Shunli Ding and Minghao Huang

Resources Policy, 2024, vol. 98, issue C

Abstract: The resource curse phenomenon poses serious challenges for many economies globally. This study examines the impact of Environmental, Social, and Governance (ESG) investments on the Resource Curse Vulnerability Index for 40 Chinese fossil fuel enterprises listed on the Shanghai Stock Exchange from 2016 to 2020. Using an autoregressive distributed lag approach, results show that ESG investments reduce vulnerability, with a 1% increase leading to a 0.43% decrease in the short term and 0.69% in the long term. However, higher total liabilities and increased Research and Development (R&D) expenditures exacerbate vulnerability. These findings suggest that financial strain and management complexity heighten resource curse risks. Policies promoting robust ESG standards, transparent reporting, and stricter anti-greenwashing regulations are crucial for sustainable enterprise management.

Keywords: China; Resource curse vulnerability index; ESG investment; Fossil fuels enterprises (search for similar items in EconPapers)
JEL-codes: G38 O53 Q33 Q42 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:98:y:2024:i:c:s0301420724007190

DOI: 10.1016/j.resourpol.2024.105352

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