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An Empirical Investigation into the Impact Mechanisms of Energy Transition in Corporate Performance

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  • Zhiying Ji

    (SILC Business School, Shanghai University, Shanghai 201800, China)

  • Yushuang Chen

    (SILC Business School, Shanghai University, Shanghai 201800, China)

Abstract

This paper empirically investigates the impact of energy transition on corporate performance by utilizing panel data from A-share listed companies in Shanghai and Shenzhen between 2008 and 2022. Employing a fixed-effects model, the analysis incorporates key mediating variables including financing constraints, research and development (R&D) investment, corporate reputation, and investor attention. The results demonstrate that the energy transition exerts a significantly positive effect on firm performance, primarily through alleviating financing constraints and stimulating R&D activities. These effects are notably stronger among firms with higher market responsiveness and in regions exhibiting greater levels of economic development—particularly small- and medium-sized enterprises (SMEs), non-state-owned firms, enterprises located in eastern China, and those operating in high-carbon-emitting industries. Furthermore, enhanced corporate reputation and heightened investor attention serve as important amplifiers, reinforcing the positive relationship between energy transition and firm performance. This suggests the existence of a virtuous cycle wherein “transition investment” facilitates “resource integration,” ultimately leading to superior “performance outcomes.” The findings highlight the strategic value of aligning energy transition efforts with firm-level capabilities, indicating that sustainable investments can serve as a pathway to both environmental and economic gains through enhanced competitiveness and stakeholder engagement.

Suggested Citation

  • Zhiying Ji & Yushuang Chen, 2025. "An Empirical Investigation into the Impact Mechanisms of Energy Transition in Corporate Performance," Sustainability, MDPI, vol. 17(13), pages 1-27, June.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:13:p:5927-:d:1689028
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