IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i3p1085-d1579380.html

Evaluating the Influence of Environmental, Social, and Governance (ESG) Performance on Green Technology Innovation: Based on Chinese A-Share Listed Companies

Author

Listed:
  • Kun Liang

    (Business College, Southwest University, Chongqing 400715, China)

  • Zhihong Cao

    (Business College, Southwest University, Chongqing 400715, China)

  • Sheng Tang

    (College of Letters & Science, University of Wisconsin, Madison, WI 53706, USA)

  • Chunguang Hu

    (School of Urban Planning and Design, Peking University, Shenzhen 518055, China)

  • Maomao Zhang

    (College of Public Administration, Huazhong University of Science and Technology, Wuhan 430079, China)

Abstract

In the context of the rapid development of the global economy, promoting corporate economic development while taking into account sustainable development has gradually become the focus of attention of countries around the world. The ESG performance reflects the differences in the assessment of enterprises’ sustainable development potential by capital market information intermediaries. These differences affect the internal governance and external financing of enterprises, thereby influencing corporate green innovation. This research is based on 1500 Shanghai-Shenzhen A-share listed companies in China from 2012 to 2022. Using green technology innovation quantity (GINUM) and green technology innovation quality (GICIT) as the measures of corporate green innovation capabilities, and by constructing a DiD model and a benchmark regression model, the dynamic relationship between ESG performance and green innovation is explored. At the same time, the mediation effect model is introduced to examine the impact of ESG performance on corporate green innovation capabilities from three perspectives: financing constraints, management’s green development awareness, and employee innovation efficiency. In addition, endogenous analysis methods and robustness test methods are employed to further ensure the reliability of the research results. The research findings show that ESG performance can significantly promote corporate green innovation capabilities. Heterogeneity analysis reveals that ESG performance significantly enhances the green technology innovation capabilities of enterprises, especially among non-state-owned small and medium-sized enterprises (SMEs) and enterprises in the eastern region. The regression coefficients for GINUM and GICIT are 0.019, 0.021, 0.084, and 0.086, respectively, all of which are statistically significant at the 1% level. The mechanism analysis shows that in terms of alleviating financing constraints, enhancing management’s green development awareness, and improving employee innovation efficiency, the regression coefficients of ESG performance for GINUM and GICIT are −1.559, −1.953, 0.018, 0.011, 0.427, and 0.495, respectively, indicating a certain promoting effect. The results of this study enrich and expand the relevant research on the relationship between ESG and corporate green innovation capabilities to a certain extent. This research is expected to provide some new practical directions for promoting green innovation capabilities within the ESG framework.

Suggested Citation

  • Kun Liang & Zhihong Cao & Sheng Tang & Chunguang Hu & Maomao Zhang, 2025. "Evaluating the Influence of Environmental, Social, and Governance (ESG) Performance on Green Technology Innovation: Based on Chinese A-Share Listed Companies," Sustainability, MDPI, vol. 17(3), pages 1-32, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:1085-:d:1579380
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/3/1085/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/3/1085/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rong, Zhao & Wu, Xiaokai & Boeing, Philipp, 2017. "The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms," Research Policy, Elsevier, vol. 46(9), pages 1533-1551.
    2. Jun-liang Du & Yong Liu & Wei-xue Diao, 2019. "Assessing Regional Differences in Green Innovation Efficiency of Industrial Enterprises in China," IJERPH, MDPI, vol. 16(6), pages 1-23, March.
    3. Han Long & Gen‐Fu Feng & Qiang Gong & Chun‐Ping Chang, 2023. "ESG performance and green innovation: An investigation based on quantile regression," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5102-5118, November.
    4. Ghisetti, Claudia & Quatraro, Francesco, 2017. "Green Technologies and Environmental Productivity: A Cross-sectoral Analysis of Direct and Indirect Effects in Italian Regions," Ecological Economics, Elsevier, vol. 132(C), pages 1-13.
    5. Long Xue & Qianyu Zhang & Xuemang Zhang & Chengyu Li, 2022. "Can Digital Transformation Promote Green Technology Innovation?," Sustainability, MDPI, vol. 14(12), pages 1-20, June.
    6. Jin, Xuanxuan & Qi, Hanying & Huang, Xin, 2024. "Green financial regulation and corporate strategic ESG behavior: Evidence from China," Finance Research Letters, Elsevier, vol. 65(C).
    7. Zhijun Feng & Bo Zeng & Qian Ming, 2018. "Environmental Regulation, Two-Way Foreign Direct Investment, and Green Innovation Efficiency in China’s Manufacturing Industry," IJERPH, MDPI, vol. 15(10), pages 1-22, October.
    8. Huang, Yumeng & Jiang, Mingdong & Bai, Yang & Zhao, Pujie & Wang, Qi, 2023. "Coordination or contradiction: Evidence from water and air pollution regulation in China," Energy Economics, Elsevier, vol. 127(PB).
    9. Roland Bénabou & Jean Tirole, 2010. "Individual and Corporate Social Responsibility," Economica, London School of Economics and Political Science, vol. 77(305), pages 1-19, January.
    10. Xue Guo & Mengyang Li & Qingyue Liu & Zimo Mao, 2024. "Impact and Mechanism Analysis of Environmental Protection Fee and Tax Reform on the ESG Performance of Heavy Polluting Enterprises," Sustainability, MDPI, vol. 16(24), pages 1-22, December.
    11. Amore, Mario Daniele & Schneider, Cédric & Žaldokas, Alminas, 2013. "Credit supply and corporate innovation," Journal of Financial Economics, Elsevier, vol. 109(3), pages 835-855.
    12. Jiangyun Li & Mingbao Chen, 2023. "Spatiotemporal Evolution and Influencing Factors of Social-Ecological System Vulnerability in the Guangdong–Hong Kong–Macau Greater Bay Area," Land, MDPI, vol. 12(4), pages 1-15, April.
    13. Jiafeng Chen & Jonathan Roth, 2024. "Logs with Zeros? Some Problems and Solutions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(2), pages 891-936.
    14. Song, Malin & Wang, Shuhong & Sun, Jing, 2018. "Environmental regulations, staff quality, green technology, R&D efficiency, and profit in manufacturing," Technological Forecasting and Social Change, Elsevier, vol. 133(C), pages 1-14.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pengcheng Wang & Shanyue Jin, 2025. "Can Green Funds Improve Corporate Carbon Performance? Firm-Level Evidence from China," Sustainability, MDPI, vol. 17(12), pages 1-19, June.
    2. Shujuan Wan & Liang Liu & Guangyao Chen & Pengtao Wang & Yafei Lan & Maomao Zhang, 2025. "Low-Carbon Transformation of Tourism in Characteristic Towns Under the Carbon Neutral Goal: A Three-Dimensional Mechanism Analysis of Tourists, Residents, and Enterprises," Sustainability, MDPI, vol. 17(11), pages 1-27, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yue‐Jun Zhang & Wei Shi & Lin Jiang, 2020. "Does China's carbon emissions trading policy improve the technology innovation of relevant enterprises?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 872-885, March.
    2. Zhangsheng Liu & Liuqingqing Yang & Liqin Fan, 2021. "Induced Effect of Environmental Regulation on Green Innovation: Evidence from the Increasing-Block Pricing Scheme," IJERPH, MDPI, vol. 18(5), pages 1-15, March.
    3. Jinqiu He & Huiwen Su, 2022. "Digital Transformation and Green Innovation of Chinese Firms: The Moderating Role of Regulatory Pressure and International Opportunities," IJERPH, MDPI, vol. 19(20), pages 1-21, October.
    4. Wang, Mei Ling, 2023. "Effects of the green finance policy on the green innovation efficiency of the manufacturing industry: A difference-in-difference model," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    5. Cui, Xin & Wang, Chunfeng & Sensoy, Ahmet & Liao, Jing & Xie, Xiaochen, 2023. "Economic policy uncertainty and green innovation: Evidence from China," Economic Modelling, Elsevier, vol. 118(C).
    6. Wan, Liyang & Wan, Qian & Yang, Zichao & Zhao, Ying, 2026. "Judicial institution and innovation: Evidence from China's intellectual property courts reform," Journal of Development Economics, Elsevier, vol. 179(C).
    7. Liu, Frank Hong & Wu, Qiang & Zhou, Yue, 2024. "Bank deregulation and corporate social responsibility," Journal of Financial Stability, Elsevier, vol. 74(C).
    8. Fu, Lili & Pan, Liyuan & Wu, Fengyun, 2021. "Does passive investment have a positive governance effect? Evidence from index funds ownership and corporate innovation," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 524-545.
    9. Li, Hemei & Liu, Zhenya & Hachard, Virginie, 2024. "Digital transformation driving green innovation: Evidence from Chinese A-Share firms," International Review of Economics & Finance, Elsevier, vol. 95(C).
    10. Liwen Sun & Ying Han, 2022. "Spatial Correlation Network Structure and Influencing Factors of Two-Stage Green Innovation Efficiency: Evidence from China," Sustainability, MDPI, vol. 14(18), pages 1-22, September.
    11. Herkenhoff, Philipp & Krautheim, Sebastian & Semrau, Finn Ole & Steglich, Frauke, 2024. "Corporate Social Responsibility along the global value chain," Journal of Development Economics, Elsevier, vol. 167(C).
    12. Huicong Li & Jie Wang & Ruzhen Zhang & Mengran Duan, 2025. "Research on the Impact of Corporate ESG Performance on Sustained Innovation in the VUCA Context: Evidence from China," Sustainability, MDPI, vol. 17(12), pages 1-21, June.
    13. Liu, Xiaoxing & Wu, Yizhong & Li, Xuemei, 2025. "How does ESG affect systemic tail risk?," International Review of Financial Analysis, Elsevier, vol. 103(C).
    14. Dong, Yuting & Sun, Ziyuan & Zhou, Yiqiang, 2026. "Not all voices are equal: stakeholder environmental pressures and corporate green innovation strategies," Journal of Business Research, Elsevier, vol. 202(C).
    15. Renhong Wu & Jinbao Li & Yunhai Dai & Xiangdong Shen & Md. Alamgir Hossain, 2024. "Impact of Environmental, Social, and Governance on Innovation in Chinese Listed Firms," Sustainability, MDPI, vol. 16(17), pages 1-24, August.
    16. Kopyrina, Olga & Wu, Kai & Ying, Zhanyu, 2023. "Greening through central inspection: The role of legitimacy pressure and risk-taking," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    17. Huang, Chongle & Hao, Simin & Ma, Limei, 2025. "The impact of ESG advantages on the economic development of neighboring regions," Energy Economics, Elsevier, vol. 145(C).
    18. Hasan Emin Gurler, 2026. "The impact of corporate social responsibility on green innovation: do industry, data type and region matter? a meta-analysis research," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(3), pages 7595-7621, March.
    19. Ziyang Shi & Danxue Fan, 2025. "Dual Mechanisms of Digital Transformation in Sustaining Green Innovation: A Supply Chain Perspective on Capability–Motivation Dynamics," Sustainability, MDPI, vol. 17(20), pages 1-34, October.
    20. Qiang Wang & Tingting Sun & Rongrong Li, 2025. "Does artificial intelligence promote green innovation? An assessment based on direct, indirect, spillover, and heterogeneity effects," Energy & Environment, , vol. 36(2), pages 1005-1037, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:1085-:d:1579380. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.