Green innovation, financialization, and ESG performance

Green innovation has the potential to drive low-carbon development and strengthen corporate ESG performance. However, the relationship between financialization and ESG performance remains complex and requires further investigation. This study conducts an empirical analysis to assess how green innovation influences ESG performance while examining the moderating ef- fect of financialization. A two-way fixed-effects model is applied to a sample of A-share-listed manufacturing firms in Shanghai and Shenzhen from 2009 to 2022. The results indicate that green innovation significantly enhances ESG performance, while financialization weakens this positive effect. Further heterogeneity analysis considers ownership structure, factor intensity, and geographic location. The results reveal that the positive impact of green innovation on ESG performance is more pronounced in non-state-owned en- terprises, technology-intensive firms, and enterprises in eastern China.