The Impact Of Esg Performance On Corporate Financing Constraints

With the increasing attention of global investors on environmental,social,and governance(ESG)issues and the enhancement of corporate social responsibility,the concept of ESG is graDUALly emerging worldwide.In recent years,the Chinese government has actively promoted sustainable development strategies and issued a series of ESG-related policy documents,such as the "Guidelines for Corporate Social Responsibility Reports" and the "Green Finance System Construction Guidelines",promoting the development of Chinese companies in the ESG field and the attention of investors to their ESG performance.However,research on ESG performance and its relationship with corporate financing constraints is limited,and a consensus has not yet been reached.Under the current domestic policy and economic background,what factors influence the improvement of a company’s ESG performance?Can it alLEViate corporate financing constraints?Is this mechanism influenced by other factors?Based on this,this article focuses on the relationship between a company’s ESG performance and financing constraints and explores the moderating effect of institutional environment based on regional division.Finally,policy recommendations are proposed based on the research conclusions.This article conducts a quantitative and literature review of domestic and foreign studies,and based on theories such as information asymmetry and signal transmission,proposes the main hypotheses of this article.Using SAmple data from A-share listed companies from 2011 to 2020,a fixed-effects model is established.Through empirical analysis,this article draws the following main conclusions:(1)a company’s good ESG performance helps to alLEViate financing constraints,and the SAme result can be obtained in the regression with a one-year and two-year lag,and the environmental indicator performs the most prominently in the alLEViation of financing constraints;(2)through analysis of corporate heterogeneity,from the perspective of corporate property rights,non-state-owned controlling enterprises have a stronger effect of ESG performance in alLEViating financing constraints than state-owned controlling enterprises.From the perspective of enterprise SIZE,larger enterprises have a stronger effect of ESG performance in alLEViating financing constraints than smaller ones;(3)institutional environment has a positive moderating effect on the mechanism of ESG performance and financing constraints,and the social(S)indicator of ESG has the strongest moderating effect.Among the three graded indicators of institutional environment,the rule of law environment indicator shows the strongest moderating effect;(4)there is a peer effect in a company’s ESG performance,that is,a company’s ESG performance LEVel is significantly influenced by the positive performance of other companies in the SAme industry in the previous year,and the peer effect in the environmental(E)indicator of ESG is the most significant,which is also applicable with a one-year lag.Based on the above research conclusions,this article puts forward some suggestions.First,it is necesSAry to promote the formulation of a localized ESG evaluation system in China,referring to international advanced experience while incorporating Chinese local characteristic issues,to provide a basis for improving ESG performance for enterprises.Second,promote ESG information disclosure by enterprises.On the one hand,the government should strengthen legislation and policy regulations on ESG information disclosure standards for enterprises,and on the other hand,increase the initiative of enterprises to disclose ESG information.Third,improve regulatory efficiency and regulatory LEVel,and be alert to the "greenwashing" phenomenon.Finally,comprehensively improve the institutional environment and pay attention to the regulatory role of the institutional environment.