Study On The Impact Of ESG Performance On The Productivity Of Manufacturing Companies

In recent years,the frequent occurrence of extreme weather,labor conflicts and other issues,overlaid with the impact of the new crown pneumonia epidemic,the uncertainty of global economic and social development has intensified,and sustainable development has become an important issue of universal concern around the world.ESG,as an assessment of corporate non-financial performance and a rating standard for long-term corporate development,is being paid attention to by society,governments,enterprises,and other parties,and is rapidly evolving and developing and moving towards practice.It has become a driving force for the continuous transformation and development of real enterprises and investment institutions.The manufacturing industry plays an irreplaceable role in driving China’s economic development and enhancing international competitiveness.Entering into a new development stage,achieving higher quality,more efficient,fairer,and more sustainable development becomes the direction and goal pursued by manufacturing enterprises’ development.Based on this,this paper studies the impact of ESG on the productivity of manufacturing enterprises,which provides useful ideas for China’s manufacturing industry to pass the "climbing over" stage,reduce risk resistance and achieve sustainable development.This study takes the A-share listed manufacturing enterprises in China from 2009 to 2020 as an example,and empirically examines the intrinsic linkage between ESG performance and enterprise productivity and its mechanism of action by combining the basic theories of sustainable development,stakeholders,signaling,and principal-agent.It is found that:(1)ESG performance of manufacturing firms can significantly enhance their productivity levels,and this finding still holds after the robustness tests of replacing explanatory variables,explanatory variables,and instrumental variables method.(2)ESG performance can improve firms’ productivity through the following two paths: first,by inducing green innovation to achieve lower production costs and higher revenues,which in turn drive the improvement of firms’ productivity.Second,by alleviating financing constraints,it achieves the optimization of internal resource allocation in order to promote the improvement of corporate productivity.(3)Both the degree of market competition and analysts’ attention can positively regulate the relationship between ESG performance and firms’ production efficiency.First,the highly competitive market environment makes ESG performance an effective tool for firms to gain differentiation advantages,which helps firms to obtain production resources from stakeholders.Secondly,analysts,with their professional information analysis capabilities,influence the processes of production,processing,and absorption of ESG information,which in turn affects the relationship between ESG performance and corporate productivity.(3)The results of the heterogeneity analysis show that among the three dimensions of ESG,the corporate governance dimension has a more significant effect on the promotion of corporate productivity,and the positive effect of ESG performance on corporate productivity is more significant in state-owned enterprises and non-environmentally sensitive enterprises.Taking manufacturing firms as the research object,this paper examines the effect of ESG performance on production efficiency enhancement,which not only enriches the relevant studies on the consequences of ESG performance and the factors influencing corporate production efficiency,but also provides an in-depth understanding of the risks and opportunities faced by manufacturing firms in the production process from the perspective of ESG,and then reveals the inner logic of ESG strategies through which firms can seek production efficiency enhancement.The study also provides an insight into the risks and opportunities faced by manufacturing companies in the production process from an ESG perspective,and thus reveals the inner logic of ESG strategies through which companies can seek productivity improvement.