ESG Ratings and Corporate Sustainable Growth Under Financing Constraints: A Dual-Route Mechanism of Green Technological Innovation and Resource Improvement

Under China’s dual-carbon and high-quality development goals, this study examines whether and how third-party ESG ratings are associated with corporate sustainable growth, defined as the internally financeable growth rate of Higgins. Using 25,683 firm-year observations of Shanghai and Shenzhen A-share listed firms from 2011 to 2022 and Huazheng ESG ratings, of which only seven of the nine levels (C to A) are observed, we estimate a moderated mediation model (Hayes Model 21). A one-level rating upgrade is associated with a 1.42 percentage-point-higher sustainable growth rate (1.69 points when profitability controls mechanically linked to the dependent variable are excluded), and a one-standard-deviation increase corresponds to 10.5% of the standard deviation of the growth rate. The association holds under instrumental-variable estimation, propensity-score matching, firm fixed effects and alternative measures. Green technological innovation, measured by green patent applications, partially mediates the relationship, but the indirect effect (0.0020) accounts for only 14.2% of the total effect; supplementary tests suggest that lower financing costs and reduced operating and crash risks are potential complementary channels behind the direct effect. Financing constraints weaken the first stage of the green technological innovation route, whereas a stronger market competitive position strengthens the second stage; the conditional indirect effect under low constraints and a strong position (0.0029) is 2.25 times that under the opposite conditions. The associations are stronger for non-state-owned, growth-stage and heavily polluting firms. The findings are consistent with a dual-route view in which ESG ratings relate to sustainable growth through both an innovation route and a resource-improvement route, each with distinct boundary conditions.