Nonlinear Impact of Corporate <scp>ESG</scp> on Firm Value: The Mediating Effect of Innovation Capability and the Moderating Effect of Big Data Application

ABSTRACT The problem of ESG hushing alienation, which is brought on by a mismatch between a company's internal operational resources and external demands, still lacks rigorous theoretical and empirical testing. Both the resource orchestration theory and the dynamic capabilities theory are used in this work. We empirically examine the predictions using data from Chinese listed firms between 2010 and 2023 with nonlinear mediation and moderation analysis. We demonstrate a U‐shaped relationship between ESG and the firm value. Evidence based on the use of big data enhances this pattern and shows that innovation capability functions as a mediator with declining marginal effects. Heterogeneity analysis further shows that the primary factors affecting the variations in the efficacy of ESG transformation are the dynamic changes in the resource pool. Our findings provide empirical micro level evidence for entrepreneurs to achieve sustainable value creation through ESG practices.