The Impact of ESG Performance on enterprises' Innovation Efficiency - Evidence from Chinese Listed Companies

Improving enterprise innovation efficiency and realizing enterprise innovation development is the basis for promoting high-quality development in China. Studying the impact of ESG performance on enterprise innovation efficiency not only helps enterprises find new growth points and innovation drivers in the context of sustainable development, but also helps to enhance their long-term competitiveness and market position. This paper thus seeks to examine the relationship between ESG performance and enterprise innovation efficiency, with a view to elucidating the manner in which ESG performance affects enterprise sustainable development. To this end, the paper employs a combination of theoretical analysis and empirical investigation, using data from Chinese A-share listed companies. It is found that good ESG performance improves enterprise innovation efficiency, and the robustness test further supports the conclusion. The mechanism analysis based on the dual dimensions of information transparency and financing constraints indicates that ESG performance improves enterprise innovation efficiency mainly through improving information transparency and alleviating financing constraints. Heterogeneity analysis shows that ESG performance has a more significant role in improving enterprise innovation efficiency in the eastern region, non-heavily polluted industries, and larger enterprises. This paper employs an innovative approach, beginning with an examination of the ESG perspective and a comprehensive examination of the multidimensional results of ESG responsibility fulfillment. In particular, it combines ESG with enterprise innovation efficiency, thereby filling a current research gap and providing empirical insights for a range of stakeholders, including enterprises, governments, and financial institutions.