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From symbolic to substantive green innovation: How does ESG ratings optimize corporate green innovation structure

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  • Zhang, Zhihe
  • Hou, Yufei
  • Li, Zixuan
  • Li, Mulin

Abstract

Green innovation, primarily substantive green innovation, is critical for improving corporate sustainable development. In contrast to existing literature, this paper examines how environment, society, and governance (ESG) optimizes corporate green innovation structure from an innovation motivation perspective. Based on A-share listed firms, this study reveals a significant enhancement of ESG ratings in corporate green innovation structure, verifying that ESG ratings can promote the shifting from symbolic to substantive green innovation. This impact operates mainly through the monitoring and incentive effects. This paper theoretically enriches the related research and emphasizes the necessity of ESG construction for sustainable development in emerging economies.

Suggested Citation

  • Zhang, Zhihe & Hou, Yufei & Li, Zixuan & Li, Mulin, 2024. "From symbolic to substantive green innovation: How does ESG ratings optimize corporate green innovation structure," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324004318
    DOI: 10.1016/j.frl.2024.105401
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    References listed on IDEAS

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    Cited by:

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    3. Zhao, Jinjing & Li, Ai & Roh, Taewoo & Su, Miao, 2025. "Escaping regulation or embracing innovation? Substantive green Innovation's role in moderating environmental policy and outward foreign direct investment," Energy, Elsevier, vol. 316(C).
    4. Zhang, Fan & Wang, Feng & Yao, Shujie, 2024. "Does government-driven infrastructure boost green innovation? Evidence of new infrastructure plan in China," Journal of Asian Economics, Elsevier, vol. 95(C).
    5. Chen, Jinrui & Zhang, Yichang, 2025. "Substantive change or strategic response? Digital industrial convergence policy and urban green innovation," Innovation and Green Development, Elsevier, vol. 4(1).
    6. Bai, Xiao & Zhao, Wenyao & Tian, Geran, 2024. "ESG certification, green innovation, and firm value: A quasi-natural experiment based on SynTao Green Finance's ESG ratings: A pre-registered study," Pacific-Basin Finance Journal, Elsevier, vol. 88(C).
    7. Bai, Xiao & Zhao, Wenyao & Tian, Geran, 2024. "ESG certification, green innovation, and firm value: A quasi-natural experiment based on SynTao Green Finance's ESG ratings: A pre-registered report," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    8. Sun, Xian & Xiong, Xiaoyan, 2025. "ESG performance and corporate innovation," Research in International Business and Finance, Elsevier, vol. 76(C).

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