Business Strategy Innovation and Investment Risk Prevention and Control under Sustainable Development: Take the Stock Markets as An Example

Renzhi Lu

doi:10.54097/de1yx773

Authors

Renzhi Lu

DOI:

https://doi.org/10.54097/de1yx773

Keywords:

Innovation strategies, Investment risk, ESG, Moderating effect, Sustainable development

Abstract

This research investigates the relationship between innovation strategies and investment risk, with a particular focus on the moderating effect of Environmental, Social, and Governance (ESG) practices. Utilizing data from Chinese listed companies, we employ multiple regression models to assess the impact of R&D investments on systematic risk (Beta) and explore how ESG scores influence this relationship. Our findings indicate that increased R&D investment is associated with higher investment risk, highlighting the inherent uncertainties and potential volatility of innovation activities. However, strong ESG practices mitigate these risks, suggesting that companies with robust ESG frameworks can reduce the additional risk introduced by high levels of innovation. The study also reveals significant interrelationships among key financial metrics, underscoring the complexity of managing innovation and investment risk. These insights provide valuable implications for companies, investors, and policymakers, emphasizing the need for balanced growth strategies that incorporate effective risk management and sustainable practices. This research contributes to the literature by offering empirical evidence on the interplay between innovation, ESG, and investment risk, ultimately advocating for more resilient and sustainable business practices.

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