IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v84y2025ics1544612325010803.html

Network infrastructure and ESG performance: The role of environmental law enforcement

Author

Listed:
  • Yu, Hong
  • Sun, Jialiang
  • Zhang, Liqin
  • Deng, Jianguang

Abstract

This study uses the “Broadband China” pilot as a quasi-natural experiment to empirically assess the impact of network infrastructure (NI) on enterprise environmental, social, and governance (ESG) performance. The results show that NI significantly enhances ESG performance, digital transformation and green innovation serve as mediating mechanisms, stronger environmental law enforcement amplifies NI’s positive effect on ESG outcomes, and NI has a more pronounced effect in enterprises with separated chief executive and board chairperson and in non-state-owned firms.

Suggested Citation

  • Yu, Hong & Sun, Jialiang & Zhang, Liqin & Deng, Jianguang, 2025. "Network infrastructure and ESG performance: The role of environmental law enforcement," Finance Research Letters, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010803
    DOI: 10.1016/j.frl.2025.107822
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325010803
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.107822?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Zongnan & Zhou, Maoyuan & Wan, Chuang & Chen, Tingzhu, 2025. "The impact of digital finance development on corporate debt maturity structure," Finance Research Letters, Elsevier, vol. 84(C).
    2. Lan, Minghui & Zhang, Guangli & Yan, Wei & Qi, Fen & Qin, Lihua, 2024. "Greening through courts:Environmental law enforcement and corporate green innovation," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 223-242.
    3. Yan, Hong & Yi, Xing & Jiang, Jiachen & Bai, Caiquan, 2024. "Can information technology construction alleviate household energy poverty? Empirical evidence from the “broadband China” Pilot Policy," Energy Policy, Elsevier, vol. 185(C).
    4. Borghesi, Richard & Houston, Joel F. & Naranjo, Andy, 2014. "Corporate socially responsible investments: CEO altruism, reputation, and shareholder interests," Journal of Corporate Finance, Elsevier, vol. 26(C), pages 164-181.
    5. Li, Huilian & Zhong, Yang, 2025. "Digital transformation of enterprises and greenwashing behavior: evidence from China," Finance Research Letters, Elsevier, vol. 82(C).
    6. Zhou, Chaobo & Zhang, Haikuo & Ying, Jinhuika & He, Shouchao & Zhang, Chong & Yan, Jiale, 2025. "Artificial intelligence and green transformation of manufacturing enterprises," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    7. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    8. Zhang, Jun & Xie, Tangkun & Kong, Xiaoran & Liu, Bo & Zhang, Wenke, 2025. "Can data assets promote green innovation in enterprises?," Finance Research Letters, Elsevier, vol. 72(C).
    9. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Post-Print halshs-02007374, HAL.
    10. Eliana La Ferrara & Alberto Chong & Suzanne Duryea, 2012. "Soap Operas and Fertility: Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 1-31, October.
    11. Zhang, Ni & Han, Hongjun, 2025. "The new environmental protection law, political connections and corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 102(C).
    12. Song, Shuxin & Wen, Jun & Li, Yan & Li, Lingxiao, 2024. "How does digital economy affect green technological innovation in China? New evidence from the “Broadband China” policy," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1093-1112.
    13. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.
    14. Jin, Shaorong & Xiong, Ruoyu & Peng, Huan & Tang, Shiyu, 2025. "ESG performance and private enterprise resilience: Evidence from Chinese financial markets," International Review of Financial Analysis, Elsevier, vol. 98(C).
    15. Wu, Ke & Zhang, Yongfang & Chen, Ying & Li, Miao, 2025. "Impact of digital finance on corporate ESG," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    16. Sun, Lu & Zhou, Haizhen & Huang, Feng, 2025. "How the introduction of the “Dual Carbon” targets drives ESG disclosure in manufacturing enterprises?," International Review of Economics & Finance, Elsevier, vol. 101(C).
    17. Pan, Junyu & Du, Lizhao & Wu, Haitao & Liu, Xiaoqian, 2024. "Does environmental law enforcement supervision improve corporate carbon reduction performance? Evidence from environmental protection interview," Energy Economics, Elsevier, vol. 132(C).
    18. Bryan W Husted & David B Allen, 2006. "Corporate social responsibility in the multinational enterprise: strategic and institutional approaches," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 838-849, November.
    19. Stefan Wager & Susan Athey, 2018. "Estimation and Inference of Heterogeneous Treatment Effects using Random Forests," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 113(523), pages 1228-1242, July.
    20. Li, Junjun & Wu, Tong & Liu, Bailu & Zhou, Ming, 2024. "Can digital transformation enhance corporate ESG performance? The moderating role of dual environmental regulations," Finance Research Letters, Elsevier, vol. 62(PB).
    21. Roland Bénabou & Jean Tirole, 2010. "Individual and Corporate Social Responsibility," Economica, London School of Economics and Political Science, vol. 77(305), pages 1-19, January.
    22. Zhang, Dongyang & Bai, Dingchuan & He, Yurun & Sun, Qiaobing, 2024. "Synergistic abatement effects of Broadband China and environmental regulation: Firm-level evidence," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    23. Pedersen, Lasse Heje & Fitzgibbons, Shaun & Pomorski, Lukasz, 2021. "Responsible investing: The ESG-efficient frontier," Journal of Financial Economics, Elsevier, vol. 142(2), pages 572-597.
    24. Wang, Qingxi & Hu, An & Tian, Zhihua, 2022. "Digital transformation and electricity consumption: Evidence from the Broadband China pilot policy," Energy Economics, Elsevier, vol. 115(C).
    25. Geng, Yini & Zheng, Zhiqiang & Yuan, Xuemei & Jiménez-Zarco, Ana Isabel, 2025. "ESG performance and total factor productivity of enterprises: the role of digitization," Research in International Business and Finance, Elsevier, vol. 77(PA).
    26. Ge, Shilong & Tu, Zhenyu & Chen, Yalin & Chong, Heap-Yih, 2025. "Data driven-sustainability: The impact of data trading platforms on corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 105(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wei Jiang & Xin Wang & Liping Liang & Mingming Leng & Xin Fang, 2025. "ESG Ratings as a Strategic Imperative: Unraveling Their Influence on Corporate Financial Performance in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 9313-9337, June.
    2. Wang, Hong & Wang, Wei, 2024. "Chairperson gender, policy compliance and ESG performance of family firms," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    3. Sakhr Bani-Khaled & Graça Azevedo & Jonas Oliveira, 2025. "Environmental, social, and governance (ESG) factors and firm value: A systematic literature review of theories and empirical evidence," AMS Review, Springer;Academy of Marketing Science, vol. 15(1), pages 228-260, June.
    4. Xiaoling Yu & Kaitian Xiao, 2022. "Does ESG Performance Affect Firm Value? Evidence from a New ESG-Scoring Approach for Chinese Enterprises," Sustainability, MDPI, vol. 14(24), pages 1-40, December.
    5. Nguyen, Van Ha & Choi, Bobae & Agbola, Frank W., 2020. "Corporate social responsibility and debt maturity: Australian evidence," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    6. Al-Shaer, Habiba & Uyar, Ali & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Do shareholders punish or reward excessive CSR engagement? Moderating effect of cash flow and firm growth," International Review of Financial Analysis, Elsevier, vol. 88(C).
    7. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    8. Valentina Marano & Steve Sauerwald & Marc Essen, 2022. "The influence of culture on the relationship between women directors and corporate social performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1315-1342, September.
    9. Shakil, Mohammad Hassan, 2021. "Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity," Resources Policy, Elsevier, vol. 72(C).
    10. Dorfleitner, Gregor & Kreuzer, Christian & Sparrer, Christian, 2022. "To sin in secret is no sin at all: On the linkage of policy, society, culture, and firm characteristics with corporate scandals," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 762-784.
    11. Andrieș, Alin Marius & Sprincean, Nicu, 2023. "ESG performance and banks’ funding costs," Finance Research Letters, Elsevier, vol. 54(C).
    12. Tristan Jourde & Arthur Stalla-Bourdillon, 2026. "Environmental preferences and sector valuations," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 162(1), pages 45-85, February.
    13. Wang, Lu & Chen, Lifeng & Zhong, Shengyang & Zhou, Qunmi, 2025. "How executive green perception affect high-quality growth: Evidence from Chinese listed companies," International Review of Financial Analysis, Elsevier, vol. 108(PB).
    14. Han Long & Gen-Fu Feng & Chun-Ping Chang, 2023. "How does ESG performance promote corporate green innovation?," Economic Change and Restructuring, Springer, vol. 56(4), pages 2889-2913, August.
    15. Qinglan Wu & Guifu Chen & Jing Han & Liyan Wu, 2022. "Does Corporate ESG Performance Improve Export Intensity? Evidence from Chinese Listed Firms," Sustainability, MDPI, vol. 14(20), pages 1-16, October.
    16. Li, Ruiqian & Huang, Tong & Ramanathan, Ramakrishnan, 2026. "Turning perception into impact: ESG risk perception and ESG controversies," Research in International Business and Finance, Elsevier, vol. 81(C).
    17. Chen, Kejie & Xie, Jie, 2025. "Digital trade and corporate ESG performance— evidence from China," International Review of Economics & Finance, Elsevier, vol. 103(C).
    18. Ramírez-Orellana, Alicia & Martínez-Victoria, MCarmen & García-Amate, Antonio & Rojo-Ramírez, Alfonso A., 2023. "Is the corporate financial strategy in the oil and gas sector affected by ESG dimensions?," Resources Policy, Elsevier, vol. 81(C).
    19. Sabbaghi, Omid, 2022. "The impact of news on the volatility of ESG firms," Global Finance Journal, Elsevier, vol. 51(C).
    20. Uyar, Ali & Gerged, Ali Meftah & Kuzey, Cemil & Hamrouni, Amal & Karaman, Abdullah S., 2024. "CSR awarding: A test of social reputation and impression management," International Review of Economics & Finance, Elsevier, vol. 96(PC).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010803. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.