How Regional Development Shapes the Link Between Managerial Climate Awareness and <scp>ESG</scp> Performance: The Role of Investment Behavior and Managerial Myopia

ABSTRACT This study investigates the impact of regional development on the relationship between managerial climate awareness (MCA) and corporate environmental, social, and governance (ESG) performance, considering the moderating influence of managerial myopic behavior and the mediating role of corporate investment behavior. Utilizing a dataset of Chinese A‐share listed firms from 2009 to 2023, we analyze how varying levels of regional development shape the effectiveness of managerial awareness in driving sustainable practices. Our findings reveal that while MCA generally enhances ESG performance, this effect is significantly negatively moderated by managerial myopia, particularly in firms located in less developed regions. Furthermore, corporate investment behavior is identified as a crucial mediator, enabling firms to align their strategic goals with long‐term sustainability objectives. This research fills critical gaps in the literature by highlighting the contextual factors influencing corporate sustainability decisions. By integrating insights from regional development theory, stakeholder theory, and resource dependence theory, we provide a nuanced understanding of the complexities surrounding ESG initiatives. This study offers practical implications for policymakers and business leaders seeking to foster effective sustainability strategies tailored to regional contexts.