The Impact of ESG on Earnings Volatility of Manufacturing Companies in China

This study examines how environmental, social, and corporate governance (ESG) performance influences a firm’s earnings volatility, considering the mediating role of financial constraints and the moderating effects of supply chain concentration. Drawing on stakeholder theory and resource de-pendency theory, the research model was proposed and hypotheses were developed to address the research questions. The study employs fixed effects regression analysis, conducted using STATA 18.0, on data from 603 manufacturing companies listed in China's A-shares market from 2013 to 2022. The results reveal that ESG significantly impacts earnings volatility, with financial constraints partially mediating this relationship, and supply chain concentration serving as a moderator. These findings have important implications for managers, policymakers, and investors.