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With high-quality development and sustainable transformation becoming core strategic objectives for enterprises, understanding the dynamic relationships among ESG performance, corporate risk-taking, and investment decisions is important for long-term value creation. Using firm-level financial data through 2024 to construct the rolling-window risk-taking measure, this study builds a final empirical panel of A-share-listed companies for the period 2018–2023 and employs a PVAR model to examine the dynamic predictive relationships among corporate ESG performance, risk-taking, and investment levels. The findings show significant dynamic associations among ESG performance, risk-taking, and investment levels. Better ESG performance is positively associated with subsequent corporate risk-taking and investment levels, although the strength of this relationship varies across model specifications and firm contexts. At the same time, higher risk-taking and investment expansion may be followed by weaker ESG performance, suggesting resource-allocation pressure and short-term governance constraints. The results also indicate that corporate risk-taking has a relatively stable positive predictive relationship with investment levels, whereas the feedback from investment levels to subsequent risk-taking is more limited. Furthermore, the economic implications of ESG performance exhibit significant regional, scale, and industry heterogeneity, with more evident dynamic linkages among firms in eastern regions, small and medium-sized enterprises, and non-high-polluting industries. Overall, this study shows that ESG performance, corporate risk-taking, and investment levels are dynamically interconnected within the PVAR framework. The findings highlight the need to integrate ESG considerations into risk governance and investment decision-making, while also emphasizing the importance of context-specific ESG policy design and institutional support.
Zhong et al. (Fri,) studied this question.