The impact of green factory construction policy on corporate ESG performance

The impact of green industrial policy on corporate sustainability has long been a focal point in academic research. This study investigates the relationship between green industrial policy and corporate environmental, social, and governance (ESG) performance, using Green Factory Construction (GFC) as a key entry point. Utilizing data from Chinese A-share listed companies from 2009 to 2021, the study applies a staggered difference-in-differences (Staggered DID) model to empirically assess the impact of GFC on ESG performance and explore its underlying mechanisms. The findings demonstrate that the establishment of green factories significantly enhances corporate ESG performance. This conclusion remains robust across a series of sensitivity tests, including placebo tests, Propensity Score Matching Difference-in-Differences (PSM-DID), and heterogeneous treatment effects. Additionally, this study identifies three key mechanisms—green technological innovation (environmental dimension), media-driven corporate social responsibility (social dimension), and alleviation of financing constraints (resource dimension)—that jointly enhance ESG performance across dimensions. Furthermore, the research examines the moderating effect of digital transformation on the relationship between GFC and ESG performance. Heterogeneity analyses reveal that the effect of GFC is more pronounced among high-polluting firms, non-state-owned enterprises, firms located in non-core cities, small-scale firms, and firms with low financing constraints. This study confirms the positive role of green industrial policy in promoting corporate ESG performance, providing both theoretical and empirical support for the advancement of green industrial policies and ESG practices.