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How do Environmental, Social and Governance Initiatives Affect Innovative Performance for Corporate Sustainability?

Author

Listed:
  • Qi Zhang

    (School of Management, Harbin Institute of Technology, Harbin 150001, China
    Centre for Governance, Institutions and Organisations, NUS Business School, National University of Singapore, Singapore 117592, Singapore)

  • Lawrence Loh

    (Centre for Governance, Institutions and Organisations, NUS Business School, National University of Singapore, Singapore 117592, Singapore)

  • Weiwei Wu

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

Abstract

Corporate sustainability has been a long-established topic in the corporate operating process. Much research focuses on the internal relationships among environmental, social and economic dimensions of corporate sustainability, yet few studies have examined the topic from the perspective of environmental, social and governance (ESG) initiatives and innovative performance. Using insights from stakeholder theory, this study develops theoretical linkages between corporate ESG initiatives and innovative performance. It further considers whether these relationships still exist under different institutional development settings. Based on the samples of 433 observations which are listed on the Shanghai and Shenzhen stock exchanges, in China, from 2007 to 2017, empirical results using the method of hierarchical regression analysis have confirmed that corporate environmental initiatives, social initiatives and governance initiatives have direct positive impacts on innovative performance. Furthermore, in examining the interactive effect of individual dimensions of ESG initiatives, the results reveal that corporate governance initiatives play a moderating role in the relationship between environmental initiatives and innovative performance and in the relationship between social initiatives and innovative performance. Finally, the empirical analyses also show that institutional development influences the effectiveness of corporate governance initiatives. This research contributes to extending the prior literature and providing several recommendations for firms to achieve corporate sustainability.

Suggested Citation

  • Qi Zhang & Lawrence Loh & Weiwei Wu, 2020. "How do Environmental, Social and Governance Initiatives Affect Innovative Performance for Corporate Sustainability?," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:8:p:3380-:d:348396
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    8. Kablan P. Kacou & Lavagnon A. Ika & Lauchlan T. Munro, 2022. "Fifty years of capacity building: Taking stock and moving research forward," Public Administration & Development, Blackwell Publishing, vol. 42(4), pages 215-232, October.
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