ESG Rating and Corporate Motivation for Green Technology Innovation: New Insights From Multidimensional External Attention

Enterprises’ varied motivations for pursuing green technology innovation (GI) might lead to varying economic and societal outcomes from their creative endeavors. This study employs data of A-share listed firms from 2009 to 2021 and a high-dimensional fixed effect model to explore how ESG rating drives enterprises’ motivations for engaging in GI. The empirical research shows that ESG rating stimulates enterprises to conduct both substantive green technology innovation (SUGI) and strategic green technology innovation (STGI). These findings hold throughout the robustness test. We also employ instrumental variable method and differences-in-differences method for endogeneity test. According to the heterogeneity analysis, the outcomes are more significant for the state-owned, growth stage and patent-intensive enterprises. In the moderating effect analysis, we find multidimensional external attention can make for differences in the impact of ESG rating on SUGI and STGI. External attention from analysts, the media, and investors can positively moderate the influence of ESG rating on enterprises’ motivation for SUGI. The influence of ESG rating on STGI in enterprises is positively moderated by investor attention, but it cannot be moderated by analyst or media attention. That is, external attention from analysts and the media can prevent enterprises from falling into formalism and enable them to leverage the motivating effect of ESG rating on SUGI. Investor attention is a point for further promoting corporate SUGI. This study gives an alternative perspective for the promotion of ESG rating and GI in China.