Efforts Toward Corporate Sustainability: Does ESG Performance and Technological Innovation Drive Corporate Financing Efficiency in China?

Muhammad Suhrab, Pinglu Chen () and Ningyu Qian ()
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Muhammad Suhrab: School of Management, Huazhong University of Science and Technology (HUST), Wuhan, P. R. China
Pinglu Chen: ��School of Management, Chair of the Department of Public Finance, Vice Dean and Leader of the Institute of Poverty Reduction and Development, Huazhong University of Science and Technology (HUST), Wuhan, P. R. China
Ningyu Qian: School of Management, Huazhong University of Science and Technology (HUST), Wuhan, P. R. China

International Journal of Innovation and Technology Management (IJITM), 2024, vol. 21, issue 08, 1-28

Abstract: This study examines the impact of environmental, social, and governance (ESG) performance and technological innovation (TI) on corporate financing efficiency (CFE) in Chinese firms. Data from 400 companies listed in the Shanghai and Shenzhen A-share markets, alongside ESG scores, were derived from the Thomson Reuters ESG scoring system spanning 2013–2022. Fixed effects (FE) and quantile regressions were employed to explore this relationship. The findings demonstrate that ESG and TI have significant and positive effects on CFE. Furthermore, TI is a moderator that strengthens the linkage between ESG and CFE. Findings emphasize the critical importance of ESG performance in obtaining cost-effective financing for Chinese firms. This underscores the critical need for businesses and regulators to prioritize and integrate ESG practices into corporate strategies. Such integration facilitates access to lower-cost financing, enhances cost efficiency, and optimizes investments in green technology. The findings emphasize the importance of fostering a sustainable corporate culture that supports the alignment of TI with ESG principles in business operations. These outcomes carry substantial implications for the corporate sector and regulatory frameworks, highlighting the pivotal role of sustainable practices in driving financial performance and long-term prosperity.

Keywords: Corporate financing efficiency; technology innovation; environmental; social and governance (ESG); sustainable practices; financial prosperity (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0219877024500615

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