Accelerating Sustainability Transitions in Resource‐Constrained and Institutionally Fragile Markets: The Role of ESG Strategies and Sustainable Innovation

The increasing global emphasis on corporate sustainability has positioned environmental, social, and governance (ESG) performance as a critical element of corporate governance and long‐term value creation. However, firms in emerging economies, particularly those within sub‐Saharan Africa (SSA) under the Belt and Road Initiative (BRI), continue to face challenges in advancing ESG practices due to institutional weaknesses, governance complexities, and financing constraints. This study examines the impact of corporate ownership structure on ESG performance among 497 manufacturing firms in SSA BRI economies from 2013 to 2023. It further investigates the mediating role of innovation capacity, represented by technological innovation and environmental innovation, and the moderating role of financing decisions, measured by equity and debt financing. Grounded in the resource‐based view, stakeholder theory, and institutional theory, the study employs dynamic generalized method of moments (GMM) estimation to address endogeneity concerns and applies MMQR to capture heterogeneous effects. The findings reveal that management, state, family, and foreign ownership positively influence ESG performance, whereas institutional and blockholder ownership negatively affect ESG outcomes. Technological and environmental innovation significantly mediate the ownership–ESG relationship. Furthermore, equity financing strengthens this relationship, whereas debt financing weakens it. The study also identifies significant heterogeneity across regional, policy, and industry contexts. The study contributes to corporate sustainability literature by integrating ownership structures, innovation capacity, and financing decisions into the ESG framework. The findings provide practical insights for policymakers, investors, and managers in designing effective governance mechanisms, promoting sustainable innovation, and developing financing strategies that enhance ESG transformation in emerging economies.