Research On The Impact Of ESG Behaviors On Firm Growth

Environmental,Social and Corporate Governance(ESG)appeared in a landmark report “Who Cares Wins” issued by the United Nations Global Compact in2004,and was subsequently proposed by the United Nations Principles for Responsible Investment(UNPRI).If companies want to achieve sustainable growth,they need to formulate a long-term development strategy guided by ESG concepts under complex and changeable social trends,strengthen environmental protection,fulfill social responsibilities,and attach importance to corporate governance.Based on China’s national conditions,combined with domestic and foreign research status and related theories,this paper selects 2693 listed companies on China’s A-share market from 2016 to 2019 for classification research and comparative analysis.Due to literature support and economic practice,three indicators including environmental protection expenditure intensity,poverty alleviation expenditure intensity,and the shareholding ratio of the largest shareholder are selected as core explanatory variables,which represent the behavioral performance of enterprises in the three dimensions of E,S,and G respectively.This study selects total assets growth rate,net profit growth rate,net asset per share growth rate,R&D expense growth rate,the logarithm of patent applications,the logarithm of green patent applications,and market share growth rate as explained variables,which represent the growth of finance,innovation,and market.Two-way fixed-effect models are constructed to explore the impact of ESG behaviors on the current and lagging period of the company’s growth in different sample situations.This paper shows the empirical results in a combination of charts and tables.Finally,system GMM models are used to test.The empirical results show that ESG behaviors have a significant impact on firm growth,and this impact appears in both the current period and the lag period,but the specific path and time sequence of the three behaviors’ impacts on firm growth are different.On the whole,for companies with only environmental protection behavior,environmental protection behavior can significantly improve market growth,but for companies with ESG behaviors,environmental protection behaviors can promote growth in finance,innovation,and market.For companies with only targeted poverty alleviation behavior,poverty alleviation behavior has a positive impact on innovation growth in the future,but for companies with ESG behaviors,poverty alleviation behaviors can directly promote financial growth in the current period.In different sample situations,the conclusions between equity concentration and firm growth are different.For companies with ESG behaviors,the concentration of equity has a significant negative impact on firm growth.For companies that have not participated in environmental protection and poverty alleviation actions,the concentration of equity has a significant impact on innovation growth.This paper enriches the empirical results in the ESG field,innovatively explores the relationship between ESG behaviors and firm growth,and builds a set of path systems in which ESG behaviors affect firm growth in different aspects.In addition,this paper proposes some suggestions to promote the sustainable development of listed companies in China and the construction of the green financial system.