The Influence Of Government-enterprise Geographic Distance、Relationship Distance On The Corporate ESG Performance

In the new stage of development,our country’s economic development model is more focused on low-carbon,green and sustainable,and this realization requires the participation of the whole society.Among them,enterprises have gradually shown their ambitions in the fields of controlling pollution and protecting the environment(E),taking responsibility and embracing the society(S),and improving mechanisms and standardized development(G).However,the practice and development of the ESG field only rely on the endogenous power of the enterprise is doomed to be alone.It also needs the joint supervision and coordination of multiple parties such as the government,the public,and the media.Based on the above background,this paper starts from the perspective of government supervision,integrates geographical economics and humanistic economics,and takes our country’s Shanghai and Shenzhen A-share listed companies from 2015 to 2021 as an empirical sample to study the impact of the geographical distance and relationship distance on corporate ESG performance effects.The empirical results show that there is an obvious negative relationship between the "geographic distance-corporate ESG performance" and "relationship distance-corporate ESG performance".That is,the closer the government and enterprises are geographically and the closer the relationship is,the better the overall ESG performance of the enterprise is,and this conclusion is still valid and robust after considering endogeneity.This also further verifies the "out of reach" effect of geographical constraints and the "closer means the better" effect of relations from the empirical level.However,the differences between the footholds and angles of geographic distance and relationship distance are destined to have significant differences in their mechanisms of action,sample groups,and impact methods.This article also made some useful explorations and attempts.First of all: Mechanism identification shows that geographic distance mainly promotes and improves companies’ ESG practices by inhibiting opportunistic behaviors such as earnings management.The relationship distance promotes the improvement of the comprehensive ESG performance of enterprises by helping enterprises obtain external financing and alleviating the degree of corporate financing constraints.Furthermore,the heterogeneity analysis shows that the effect of the geographical distance and relationship distance between government and enterprises varies in different groups such as industries,locations,executive backgrounds,transportation convenience and dialect culture.In addition,extensive research has shown that the threshold of the "shock and deterrence effect" of geographical distance on corporate ESG is about 180 km,which is basically limited to the administrative scope of the province,and the impact on social responsibility(S)and internal governance(G)is more prominent.The relationship distance is different,and its effect on environmental protection(E)and social responsibility(S)is more prominent.Besides,the influence of different types of political connection experience on ESG practice is different,and it is not "the more the better",but will show different effects in different combinations.Based on the above conclusions,this paper puts forward relevant suggestions for promoting our country’s ecological green development and the overall improvement of corporate ESG performance: First,"strengthening the iron requires one’s own hard work." Enterprises should pay more attention to ESG performance from the perspective of ideology and behavioral practice,and strive for it.Second,strengthen top-level design and system construction,and give full play to the main role of the government as a "navigator","guide" and "regulator" in the ESG development process.Third,strengthen the construction of a clean government,establish a sunny government,standardize the construction of political connections and government-enterprise relations,and effectively build a fair government that is "professional and clean,and pro-integrity".Fourth,improve multiple supervision and governance channels,promote multiple aspects and multiple effects simultaneously,and promote the diversification of supervisory entities and the scientific development of supervisory methods.This paper conducts a granular and refined in-depth analysis of the geographical distance and relationship distance between the government and enterprises from the aspects of research content,research angles and research methods.It has a certain degree of expansion,which further enriches the research results and empirical framework related to the distance between government and enterprises and corporate ESG practice.