The Impact of Environmental Social Responsibility on Total Factor Productivity: Evidence from Listed Companies in China

In recent years, China’s environmental policies have continued to promote sustainable development, and listed companies have increased their environmental investment and strengthened their environmental social responsibility. Although there has been much research on the relationship between environmental performance and total factor productivity of listed companies, the impact of environmental social responsibility on total factor productivity has not yet been fully examined. In this paper, we use panel data regression to investigate the linear and non-linear relationships between environmental social responsibility and total factor productivity. These relationships are tested for robustness, analyzed for between-group differences, and validated by a machine learning model. Firstly, we find that environmental social responsibility can significantly contribute to companies’ total factor productivity within a certain range, but it varies across different categories of firms. Secondly, there is an inverted U-shape relationship between environmental social responsibility and total factor productivity, where total factor productivity initially increases with environmental social responsibility but decreases after reaching a certain threshold. Finally, we conclude that environmental social responsibility promotes total factor productivity in the early stages, but when environmental social responsibility reaches a certain threshold, it begins to exert an inhibitory effect on the development of total factor productivity.