An Empirical Investigation into the Impact Mechanisms of Energy Transition in Corporate Performance

Zhiying Ji () and Yushuang Chen
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Zhiying Ji: SILC Business School, Shanghai University, Shanghai 201800, China
Yushuang Chen: SILC Business School, Shanghai University, Shanghai 201800, China

Sustainability, 2025, vol. 17, issue 13, 1-27

Abstract: This paper empirically investigates the impact of energy transition on corporate performance by utilizing panel data from A-share listed companies in Shanghai and Shenzhen between 2008 and 2022. Employing a fixed-effects model, the analysis incorporates key mediating variables including financing constraints, research and development (R&D) investment, corporate reputation, and investor attention. The results demonstrate that the energy transition exerts a significantly positive effect on firm performance, primarily through alleviating financing constraints and stimulating R&D activities. These effects are notably stronger among firms with higher market responsiveness and in regions exhibiting greater levels of economic development—particularly small- and medium-sized enterprises (SMEs), non-state-owned firms, enterprises located in eastern China, and those operating in high-carbon-emitting industries. Furthermore, enhanced corporate reputation and heightened investor attention serve as important amplifiers, reinforcing the positive relationship between energy transition and firm performance. This suggests the existence of a virtuous cycle wherein “transition investment” facilitates “resource integration,” ultimately leading to superior “performance outcomes.” The findings highlight the strategic value of aligning energy transition efforts with firm-level capabilities, indicating that sustainable investments can serve as a pathway to both environmental and economic gains through enhanced competitiveness and stakeholder engagement.

Keywords: energy transition; corporate performance; financing constraints; R&D investment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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