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Corporate ESG and total factor productivity: Will the fulfillment of social responsibility sacrifice productivity?

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  • Jian Chen

Abstract

With the increasing prominence of climate and energy issues, enterprises, as the micro-subjects of economic activities, need to pay attention to environmental responsibility to promote sustainable and high-quality economic development. However, one of the crucial controversies is whether enterprises will sacrifice efficiency to fulfill their environmental responsibilities. To try our best to answer the controversy, this paper explores the impact of ESG on total factor productivity and its mechanism. The research conclusion shows that Chinese enterprises fulfilling ESG responsibilities can improve staff efficiency, reduce financing costs, ease financing constraints, and increase innovation investment, thus effectively improving total factor productivity. Compared to non-state-owned enterprises, this effect is more significant in state-owned enterprises. In addition, the promotion of ESG construction on the total factor productivity of enterprises also presents specific acceleration characteristics. This shows that in the socialist market economy environment, there is an obvious "social responsibility dividend" in the implementation of the ESG concept by Chinese enterprises, which is helpful to enhance their long-term value and realize a win-win of social value and commercial value. The conclusions of this study help deal correctly with the relationship between business value and social value of enterprises and provide inspiration for promoting healthy and sustainable economic development.

Suggested Citation

  • Jian Chen, 2024. "Corporate ESG and total factor productivity: Will the fulfillment of social responsibility sacrifice productivity?," PLOS ONE, Public Library of Science, vol. 19(4), pages 1-21, April.
    • Handle: RePEc:plo:pone00:0301701
    DOI: 10.1371/journal.pone.0301701
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    References listed on IDEAS

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    Cited by:

    1. Wu, Liangpeng & Tang, Yujing & Meng, Lei & Zhu, Qingyuan & Zhou, Dequn, 2025. "Navigating ESG rating divergence: Implications for labor investment efficiency and firm adaptation strategy," Global Finance Journal, Elsevier, vol. 67(C).
    2. Jian, Wenze & Lu, Hang & Yang, Zimo & Zhong, Ziqi, 2026. "The sustainability payoff of AI: Revisiting TFP in corporate and societal performance," International Review of Financial Analysis, Elsevier, vol. 110(C).
    3. Sun, Liyan & Huang, Chengya & Yang, Li, 2026. "Can data factor aggregation enhance enterprise resilience?— A quasi-natural experiment employing national big data comprehensive pilot zone," International Review of Economics & Finance, Elsevier, vol. 106(C).

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