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Facilitating or constraining: The influence of governmental and private venture capital on ESG performance

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  • Su, Taoyong
  • Guo, Xin
  • Liu, Wei
  • Hou, Wanrong

Abstract

As critical stakeholders, venture capitalists (VCs) play a key role in offering resources and influencing decision-making in their investee firms. This study investigates the differential impacts of governmental venture capital (GVC) and private venture capital (PVC) on firms’ environmental, social, and governance (ESG) performance, while also exploring the moderating role of managerial overconfidence—a key characteristic of firm managers. Drawing on a sample of Chinese enterprises, we find that GVC funding enhances ESG performance of investee firms, whereas PVC funding tends to diminish it. Moreover, managerial overconfidence, which reflects firms’ propensity for risk-taking and reputation-seeking, strengthens the positive effect of GVC funding and mitigates the negative effect of PVC funding on ESG performance. These findings contribute to the literature by elucidating the contrasting impacts of GVC and PVC on ESG outcomes and highlighting the role of the VC–manager congruence in shaping sustainable corporate practices.

Suggested Citation

  • Su, Taoyong & Guo, Xin & Liu, Wei & Hou, Wanrong, 2026. "Facilitating or constraining: The influence of governmental and private venture capital on ESG performance," Journal of Business Research, Elsevier, vol. 210(C).
    • Handle: RePEc:eee:jbrese:v:210:y:2026:i:c:s0148296326001931
    DOI: 10.1016/j.jbusres.2026.116158
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