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Local green finance policies and corporate ESG performance

Author

Listed:
  • Qihang Xue
  • Huimin Wang
  • Caiquan Bai

Abstract

Based on China's government‐business relations theory, we use difference‐in‐differences and causal forest to find that local green finance policies can significantly enhance corporate ESG performance especially for nonstate‐owned companies, companies with high levels of executive social capital, non‐heavily polluting companies, and companies in developed regions. We also find that the corporate financing constraint mitigation effect and the regional environmental regulation effect of local green finance policies are important mechanisms for promoting corporate ESG performance. Additionally, local green finance policies can strengthen the positive role of corporate ESG performance in enhancing corporate value, which is conducive to corporate sustainability.

Suggested Citation

  • Qihang Xue & Huimin Wang & Caiquan Bai, 2023. "Local green finance policies and corporate ESG performance," International Review of Finance, International Review of Finance Ltd., vol. 23(4), pages 721-749, December.
    • Handle: RePEc:bla:irvfin:v:23:y:2023:i:4:p:721-749
    DOI: 10.1111/irfi.12417
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