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Keywords

ESG performance, green innovation quality, green innovation quantity, environmental regulation, executive green cognition, financing constraints, technological integration capabilities

Abstract

The sustainable development strategy emphasizes the imperative for enterprises to achieve a marked ‘ quality improvement’ in green innovation, guided by the principles of Environmental, Social, and Corporate Governance (ESG). Drawing upon a comprehensive dataset comprising Shanghai and Shenzhen A-share listed companies spanning the years from 2011 to 2022, this paper delves into the intricate dynamics between enterprise ESG performance and the quality and quantity of green innovation. By examining these relationships and their underlying mechanisms, as well as the influence of environmental regulation and executive green cognition, the study aims to unveil the latent potential role of ESG development in fostering green innovation within enterprises. Furthermore, it seeks to provide robust theoretical support for future policy formulation and enterprise practices. Employing empirical research methods, this paper meticulously dissects the complex interplay between enterprise ESG performance and green innovation, analyzing it from both the quality and quantity dimensions. The research findings unveil a fascinating U-shaped relationship between enterprise ESG performance and the quality and quantity of green innovation. Specifically, as ESG performance gradually improves, green innovation initially experiences a decline, followed by a subsequent increase. However, in the long-term perspective, the impact on the quality of green innovation is notably more significant. This revelation underscores the notion that enterprises may encounter short-term hurdles in green innovation during their nascent stages of pursuing ESG development. However, sustained commitment and relentless pursuit will ultimately lead to substantial enhancements in green innovation quality. The paper further delves into the regulatory role of environmental regulation and executive green cognition in shaping the relationship between ESG performance and green innovation. The study uncovers that both environmental regulation and the green cognition of senior executives can exert a positive influence on the green innovation emanating from enterprise ESG performance. These factors help to alleviate the inherent lag in green innovation processes, thereby enabling enterprises to embark on a smoother trajectory towards green transformation. Mechanism research conducted in this paper sheds light on how enterprise ESG performance provides robust support for green innovation by alleviating financing constraints and enhancing technology integration capabilities. This dual-pronged approach fosters an environment conducive to green innovation, ensuring that enterprises can harness the full potential of their ESG efforts. Moreover, the heterogeneous research findings reveal intriguing regional and industry-specific nuances in the relationship between ESG performance and green innovation. In the eastern and central regions, the U-shaped relationship with respect to the quality of green innovation is more pronounced, suggesting that these regions may possess more favorable conditions for fostering high-quality green innovations. Conversely, in terms of the quantity of green innovation, the U-shaped effect is more evident in other regions. Additionally, state-owned enterprises, those operating in non-highly polluting industries, and high-tech industries exhibit stronger capabilities in leveraging ESG performance to positively influence green innovation. In conclusion, the research presented in this paper not only offers a fresh perspective and theoretical support for the exploration of green innovation within enterprises but also provides empirical evidence for the construction and refinement of a market-oriented green development system in practice. The research findings will serve as a valuable guide for enterprises in formulating scientific ESG development strategies, promoting the enhancement of green innovation quality, and ultimately contributing to the realization of sustainable development goals.

DOI

10. 16315 / j. stm. 2024. 06. 008

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