What question did this study set out to answer?

To examine whether and how environmental, social, and governance (ESG) performance drives firm green transformation through technological innovation and productivity improvements among Chinese listed enterprises.

August 19, 2026International Journal of Emerging Markets

From compliance to transformation: how ESG performance drives firm green transformation

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Authors

JLJingjing LyuNortheast Normal University YZYixiao ZhuRenmin University of China

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Implication

Panel analysis reveals higher ESG performance enhances green innovation and productivity in Chinese listed firms, indicating ESG acts as an internal transformation capability.

Key Points

To examine whether and how environmental, social, and governance (ESG) performance drives firm green transformation through technological innovation and productivity improvements among Chinese listed enterprises.
Analyzed an unbalanced panel dataset of Chinese A-share listed firms spanning from 2015 to 2024.
Measured green transformation using independent green patent filings, joint green patent filings, and total factor productivity calculated via the Levinsohn–Petrin method.
Estimated baseline fixed-effects regressions alongside propensity score matching fixed-effects (PSM-FE) and system generalized method of moments (GMM) models to mitigate endogeneity and selection bias.
Higher ESG performance significantly increases independent green patent filings, collaborative green patent filings, and total factor productivity.
Transmission mechanism tests indicate that ESG engagement operates by expanding innovation human capital, strengthening internal control quality, and easing corporate financing constraints.
Heterogeneity analyses reveal that the positive impact of ESG performance on green transformation is significantly stronger among technology-intensive firms and small-sized enterprises.

Cite This Study

Lyu et al. (2026) studied this question.

synapsesocial.com/papers/6a85639d03308d306e2d6d6c https://doi.org/10.1108/ijoem-02-2026-0476

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Implication

Panel analysis reveals higher ESG performance enhances green innovation and productivity in Chinese listed firms, indicating ESG acts as an internal transformation capability.

From compliance to transformation: how ESG performance drives firm green transformation

Discussion

Member takes

Implication

Key Points

Cite This Study

From compliance to transformation: how ESG performance drives firm green transformation

Discussion

Member takes

Implication

Key Points

Cite This Study

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