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Environmental, Social and Corporate Governance (ESG) and Total Factor Productivity: The Mediating Role of Financing Constraints and R&D Investment

Author

Listed:
  • Haoming Ding

    (The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea)

  • Wei Han

    (The Graduate School of Management of Technology, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea)

  • Zerui Wang

    (The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea)

Abstract

In recent years, “environment, society and governance” (ESG) has attracted widespread attention. As an investment philosophy focused on long-term value creation and non-financial performance indicators, ESG addresses internal governance challenges and fosters high-quality economic and social development. This study uses panel data analysis of 9125 observations from 1305 eligible companies to examine the relationship between ESG ratings, financing constraints, corporate research and development (R&D), and total factor productivity (TFP). It focuses on heavily polluting enterprises listed on the Shanghai and Shenzhen A-shares from 2012 to 2022. The findings show that (1) ESG ratings significantly impact TFP for the better, and (2) financial limitations act as a go-between for the ESG ratings and TFP connection, and (3) corporate R&D also serves as a mediator between ESG ratings and TFP. These findings offer valuable insights for shaping corporate ESG strategies, driving green transformation, enhancing productivity, advancing sustainable development, and supporting high-level environmental protection.

Suggested Citation

  • Haoming Ding & Wei Han & Zerui Wang, 2024. "Environmental, Social and Corporate Governance (ESG) and Total Factor Productivity: The Mediating Role of Financing Constraints and R&D Investment," Sustainability, MDPI, vol. 16(21), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:21:p:9500-:d:1511732
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    References listed on IDEAS

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    Cited by:

    1. Costantiello, Alberto & Drago, Carlo & Arnone, Massimo & Leogrande, Angelo, 2024. "Regional Research Intensity and ESG Indicators in Italy: Insights from Panel Data Models and Machine Learning," MPRA Paper 124185, University Library of Munich, Germany.
    2. Haoming Ding & Zerui Wang, 2025. "The Influence of Institutional Pressures on Environmental, Social, and Governance Responsibility Fulfillment: Insights from Chinese Listed Firms," Sustainability, MDPI, vol. 17(9), pages 1-13, April.
    3. Qi Gong & Jiahui Gu & Zhaoyang Kong & Siyan Shen & Xiucheng Dong & Yang Li & Chade Li, 2025. "The Impact of ESG Ratings on Corporate Sustainability: Evidence from Chinese Listed Firms," Sustainability, MDPI, vol. 17(13), pages 1-25, June.
    4. Jingnan Wang & Yue Liu & Boyan Zou & Tonghai Ji, 2025. "Green Light or Green Burden: ESG’s Dual Effect on Financing Constraints in China’s Heavily Polluting Industries," Sustainability, MDPI, vol. 17(20), pages 1-31, October.

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