Sustainable Finance in Space: How Bank Agglomeration Shapes Corporate <scp>ESG</scp> Performance

ABSTRACT While prior research has examined the role of the banking sector in corporate ESG transformation, the internal financial mechanisms and external driving forces involved remain underexplored. Drawing on multi‐source big data, this study constructs an ESG financial cooperation index for Chinese listed companies and identifies ESG‐related news from over 10 million media texts. It investigates the relationship between bank agglomeration and corporate ESG performance. The findings suggest that bank agglomeration enhances corporate ESG outcomes primarily by fostering ESG financial cooperation, with media attention to ESG issues further amplifying this effect. Heterogeneity analysis reveals that the impact is more pronounced among private firms, non‐recessionary enterprises, and downstream firms in the supply chain. Additionally, bank entry and exit contribute to reshaping the spatial distribution of credit resources, with bank entry significantly encouraging corporate ESG practices. State‐owned bank agglomeration predominantly improves environmental performance, joint‐stock banks focus on social responsibility and governance, and foreign banks drive comprehensive ESG development. This paper proposes a novel pathway for sustainable financial cooperation to empower corporate ESG transformation and expands the theoretical perspective by highlighting the role of media ESG attention, offering valuable insights for the transition of emerging economies.