ESG ratings and corporate clean production from the perspective of evolutionary game theory: Evidence from A-share listed companies

First, we developed a dynamic evolutionary game model with three main players: enterprises, ESG rating agencies, and investors. This model is designed to characterise the evolutionary stability of the strategic choices made by each participant and the mechanisms underlying differentiated behavioural decision-making. Second, grounded in the stable strategy outcomes derived from the three-party evolutionary game, we used the data of Chinese A-share listed companies from 2009 to 2023 to establish a two-way fixed-effects model. This enables us to empirically examine the impact and underlying channels of ESG ratings on corporate clean production. The findings indicate that ESG ratings can significantly motivate enterprises to engage in clean production. This is demonstrated by promoting corporate front-end pollution prevention and control, mid-process green production, and end-of-line pollution treatment. Mechanistic analysis reveals that ESG ratings drive clean production efforts through three main mechanisms: alleviating financing constraints, generating market incentive effects, and exerting external supervision effects. Specifically, the alleviation of financing constraints is achieved by reducing the cost of debt financing and expanding the financing channels. Heterogeneity analysis further shows that the promotional effect exhibits biases depending on variations in formal institutions, informal institutions, executive green awareness, industry pollution, and property rights. This study has profound academic implications for advancing the construction of an ESG evaluation system and facilitating enterprises' pursuit of green development.