The Impact and Mechanism of ESG Performance on Corporate Continuous Innovation: Evidence from China

Li Ren () and Yanping Cheng
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Li Ren: Economics and Management School, Shanxi University, Taiyuan 030006, China
Yanping Cheng: Institute for the Study of Jin Merchants, Shanxi University, Taiyuan 030006, China

Sustainability, 2024, vol. 16, issue 17, 1-22

Abstract: In recent years, investing based on ESG performance has become a mainstream investment strategy in the market. In this context, this study selected A-share listed companies from 2010 to 2022 as samples and adopted a panel fixed-effect model to empirically test the impact and mechanism of ESG performance on continuous innovation. The research showed that ESG performance could significantly promote corporate continuous innovation. The mechanism tests found it worked mainly through the channels of alleviating financing constraints, increasing social trust, reducing agency costs, focusing on human capital, and enhancing social capital. Heterogeneity tests found that this effect was more significant for state-owned enterprises, weak marketization, and epidemic shocks. Further research showed that ESG exhibited a more significant level of sustained innovation in the growth and maturity stages. And ESG performance had a significant contribution to corporate innovation resilience. The conclusions of this study enrich the research in the field of ESG performance and corporate continuous innovation and provide empirical evidence for strengthening sustainable development strategies.

Keywords: ESG performance; continuous innovation; sustainable development; mechanism study; innovation resilience (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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