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Does supply chain finance improve firms’ ESG performance?

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  • Wang, Shaohua
  • Hu, Hong
  • Fan, Hong

Abstract

This study investigates the impact of supply chain finance (SCF) participation on firms’ ESG performance by studying Chinese companies between 2011 and 2021. We find a significant positive association between SCF participation and ESG performance. Additional analysis indicates that SCF improves ESG by alleviating financial constraints and enhancing operational scrutiny. The results are consistent across various ESG and SCF measures and remain robust after endogeneity concerns are addressed.

Suggested Citation

  • Wang, Shaohua & Hu, Hong & Fan, Hong, 2025. "Does supply chain finance improve firms’ ESG performance?," Economics Letters, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176524005822
    DOI: 10.1016/j.econlet.2024.112098
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    References listed on IDEAS

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    1. Feng, Jia & Tang, JiJun & Qi, Zhenyu & Liu, Jialin, 2024. "Supply Chain Finance and Innovation Investment: Based on financing constraints," Finance Research Letters, Elsevier, vol. 63(C).
    2. Di Giuli, Alberta & Laux, Paul A., 2022. "The effect of media-linked directors on financing and external governance," Journal of Financial Economics, Elsevier, vol. 145(2), pages 103-131.
    3. Zheng, Xiaxuan & Chen, Yueyan, 2024. "Does supply-chain-finance help to improve the efficiency of outward foreign direct investment?," Finance Research Letters, Elsevier, vol. 59(C).
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    Cited by:

    1. Alam, Ahmed W. & Houston, Reza, 2025. "Politically connected suppliers and firm financial stability," Economics Letters, Elsevier, vol. 254(C).

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