The Impact of Corporate ESG Performance on Total Factor Productivity: From the Perspective of Supply Chain Transmission

Corporate ESG (Environmental, Social, and Governance) practices are crucial for promoting high-quality development and achieving green transformation. Using matched data from Chinese A-share listed companies and tax surveys from 2009 to 2022, this study empirically examines the impact of corporate ESG performance on total factor productivity (TFP) and its transmission mechanism within supply chain networks. The research finds that improved ESG performance not only significantly boosts a firms own TFP growth but also generates asymmetric spillover effects through the supply chain: the positive impact of midstream enterprises on downstream customer firms is significantly stronger than on upstream suppliers. Mechanism analysis reveals that ESG practices enhance efficiency through three pathways: reducing intermediate input costs, optimizing resource allocation efficiency, and promoting innovation spillovers. Heterogeneity analysis shows that these spillover effects are more pronounced in state-owned enterprises, listed companies, and larger firms. Further research indicates that the efficiency-enhancing role of ESG in supply chains is more significant in industries with strict environmental regulations and is not significantly affected by firms dual roles as both suppliers and customers. The findings provide new evidence on the network externalities of ESG practices and offer important insights for improving green supply chain policies and driving high-quality economic development.