The Impact of ESG Ratings on Enterprises' Green Innovation Capability: An Empirical Study Based on Staggered Difference-in-Differences（Staggered DID）

Based on a Staggered Difference-in-Differences（Staggered DID） model, this paper empirically examines the impact of ESG ratings on corporate green innovation capability and its mechanism. The study takes Chinese A-share listed companies from 2009 to 2023 as a sample, and uses the first announcement of ESG ratings by SynTao Green Finance as an exogenous shock. The study finds that ESG ratings significantly enhance the green innovation capacity of enterprises, increasing the total green innovation by 12.19% on average, and the promotion effect on green invention patents is larger than that on green utility model patents. Moreover, the robustness of the results was verified by parallel trend test, placebo test, and changing the sample interval. Heterogeneity analysis shows that the promotion effect is more significant in larger firms. Further mechanism tests reveal that financing constraints and supply chain discourse are key moderating variables: financing constraints weaken the positive effect of ESG on green innovation, and supply chain discourse strengthens the positive effect of ESG on green innovation. This study provides empirical evidence to understand how ESG ratings drive corporate green innovation by alleviating information asymmetry, strengthening reputational monitoring and optimising resource allocation, and provides insights for companies to optimise ESG strategies, governments to improve green financial policies and promote industry chain synergies.