The Impact Of ESG Performance On Corporate Innovation

According to the Statistical Bulletin of 2021 National Science and Technology Expenditure released by the National Bureau of Statistics on August 31,2022,the ratio of R&D expenditure of Chinese to GDP is 2.44%,which is higher than that in 2020.However,there is still a certain gap compared with developed countries.The report to the 20 th National Congress of the Communist Party of China(CPC)also pointed out that the problem of unbalanced and inadequate development is still serious,there are still many bottlenecks in promoting high-quality development,scientific and technological innovation capacity is still not strong.Chinese enterprises still need to improve the level of innovation.The proposal of the CPC Central Committee on formulating the 14 th Five-year Plan for economic and social development and the long-range objectives through the year 2035 pointed out that enterprises should enhance their technological innovation capabilities,strengthen their leading role in innovation,and encourage them to increase investment in research and development.As the main body of microeconomy and the important driver of economic and social development,enterprises should play their part in promoting high-quality economic development.As a new development concept that comprehensively considers environment,social responsibility and corporate governance in the operation and development strategy of enterprises,ESG is highly consistent with the high-quality development requirements of“innovation,coordination,green,open and sharing”.It is the main focus and effective tool for promoting high-quality economic development.The ESG performance of enterprises reflects the development concept of pursuing the unity of economic value and social value,and reflects the sustainable development ability of enterprises.Whether improving the performance of enterprises’ ESG can effectively enhance the level of enterprise innovation and promote the high-quality development of Chinese economy needs to be further tested.This paper takes A-share listed enterprises in Shanghai and Shenzhen from 2009 to2021 as data samples to test whether the ESG performance promotes enterprise innovation.This study enriches the literature on the economic consequences of ESG performance and the factors influencing enterprise innovation,and provides theoretical support for encouraging enterprises to continuously improve ESG performance.Based on stakeholder theory,signal transmission theory and principal-agent theory,this paper studies the following questions.What is the relationship between ESG performance and enterprise innovation?Whether product market competition and executive’s academic experience play a moderating role in the relationship between the ESG performance and enterprise innovation?Whether financing constraints and risk-taking mediate the relationship between the ESG performance and enterprise innovation? Is there heterogeneity in the impact of the ESG performance on enterprise innovation under different property rights and industry properties?The results are as follows.(1)ESG performance promotes enterprise innovation.(2)Product market competition and executive’s academic experience have a positive moderating effect on the relationship between the ESG performance and enterprise innovation.(3)The ESG performance can promote enterprise innovation by easing financing constraints and improving the level of risk taking.(4)Compared with state-owned enterprises and enterprises in heavily polluting industries,the promotion effect of the ESG performance on enterprise innovation is more obviously in non-state-owned enterprises and enterprises in non-heavily polluting industries.The innovations of this paper are as follows.Firstly,it provides a new perspective for the research on the influencing factors of enterprise innovation from the perspective of ESG performance.Secondly,it expands the influence of internal and external factors on the relationship between ESG performance and enterprise innovation.The suggestions of this paper are as follows.Firstly,the government and relevant regulatory departments should improve the ESG information disclosure system,establish a corresponding incentive supervision mechanism,and establish a sound ESG evaluation system.Secondly,enterprises should incorporate the ESG performance into their business strategy,actively improve their ESG performance,and proactively disclose ESG reports.