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Does Information Transparency Moderate the Relationship Between ESG and Green Innovation? Empirical Evidence from China

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  • Mengdi Qin

    (Business and Economics, Sejong University, Seoul 05006, Republic of Korea)

  • Eunmi Tatum Lee

    (Business and Economics, Sejong University, Seoul 05006, Republic of Korea)

Abstract

The results regarding whether the relationship between environmental, social, and governance activities and green innovation is linear or non-linear are inconsistent. Therefore, by drawing on stakeholder theory and neoclassical perspective, we re-examined the relationship and con-firmed the non-linear relationship between environmental, social, and governance activities and green innovation, which constitutes the academic contribution of this paper. In particular, we investigated the moderating effect of information transparency on the relationship by constructing an index using five indicators from Chinese databases. By merging Chinese local databases, more than 3000 companies listed on the Shanghai and Shenzhen Stock Exchanges in China were analyzed, with the fixed-effect estimation methods confirming a U-shaped relationship. The results further showed that information transparency strengthens the U-shaped relationship between environmental, social, and governance activities and green innovation. Our study provides an important implication that a high level of information transparency enhances this relationship in emerging economies such as China, where information transparency is relatively less developed.

Suggested Citation

  • Mengdi Qin & Eunmi Tatum Lee, 2024. "Does Information Transparency Moderate the Relationship Between ESG and Green Innovation? Empirical Evidence from China," Sustainability, MDPI, vol. 16(23), pages 1-17, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10245-:d:1527517
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