Intellectual property strategy and corporate ESG performance: A quasi-natural experiment from national intellectual property demonstration cities

This paper takes the intellectual property model city as a pseudo-natural experiment, selects the data associated with publicly traded companies on the Shanghai and Shenzhen A-share markets in China from 2009 to 2021 as the research specimens, and adopts the Difference-in-Differences (DID) to examine the causal impact of intellectual property strategy implementation on corporate ESG performance. The study finds that intellectual property strategy substantially enhances corporate ESG performance, and this determination remains robust after a variety of sensitivity analyses containing the test for the parallelism of trends, dummy test, and PSM-DID estimation. Intellectual property strategy improves corporate ESG by reducing systemic transaction costs, alleviating financing constraints, and fostering green innovation. Heterogeneity analysis indicates that the intellectual property strategy exerts a more significant impact on state-owned firms, technology-intensive enterprises, severely polluted enterprises, medium and large enterprises, and enterprises in the eastern region in promoting ESG performance of enterprises. The findings indicate that intellectual property strategy is critical in facilitating the sustainable development of enterprises.