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How does fintech prompt corporations toward ESG sustainable development? Evidence from China

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  • Ding, Jinxiu
  • Li, Lingxue
  • Zhao, Jinsong

Abstract

The rise of fintech and concerns over environmental, social and governance (ESG) practices with regard to corporate strategy represent two leading economic trends over recent years. This paper examines how the development of fintech affects corporate ESG practices in the context of emerging markets. We find that fintech development contributes to improving corporate ESG activities, and this finding is robust to a variety of quantitative extensions. We further identify two economic mechanisms, one is reduced cost of equity and increased equity and short-term loan issuance in both the equity and credit markets, the other is increased attention of stakeholders, which are the main channels through which fintech development boosts corporate ESG practices. Our research shed lights on how technological progress influences corporate organizations' long-term value behavior.

Suggested Citation

  • Ding, Jinxiu & Li, Lingxue & Zhao, Jinsong, 2024. "How does fintech prompt corporations toward ESG sustainable development? Evidence from China," Energy Economics, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:eneeco:v:131:y:2024:i:c:s0140988324000951
    DOI: 10.1016/j.eneco.2024.107387
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    Keywords

    Fintech; ESG; Financial constraints; Stakeholders' attention; Long-term value;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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