A Study on the Impact of ESG Performance on Green Innovation Performance of Listed Manufacturing Enterprises in China

Abstract

In the context of the global economy, environmental issues have garnered significant attention, and the green innovation performance of the manufacturing industry, as a pivotal component of economic development, has emerged as a pivotal concern in achieving sustainable growth.The concept of Environmental, Social and Corporate Governance (ESG) has garnered considerable global attention, prompting an increasing number of manufacturing enterprises to integrate ESG factors into their strategic planning to enhance competitiveness and social responsibility. However, manufacturing industries often encounter challenges such as technological limitations, financial constraints, and market competition when pursuing green innovation pathways.Therefore, exploring the impact of ESG performance on green innovation performance can provide enterprises with strategic references. Such references can facilitate the analysis of the correlation mechanism between ESG and green innovation performance. This, in turn, can assist enterprises in acquiring financial support, optimizing resource allocation, and reducing innovation costs. Concurrently, enterprises can enhance their corporate image, garner social recognition, and cultivate a more conducive external environment for green innovation by fortifying their ESG management.In consideration of the aforementioned background, this study utilizes the ESG performance of the manufacturing industry as its point of departure for research. The study's objective is to examine the impact of ESG performance on the green innovation performance of manufacturing industry enterprises. To this end, it employs a two-way fixed effect model to investigate the impact of ESG performance on green innovation performance. The findings of the study demonstrate that commendable ESG performance exerts a discernible stimulatory influence on the green innovation performance of enterprises. Consequently, manufacturing enterprises are required to proactively adopt the concept of ESG development, explicitly acknowledge the beneficial impact of ESG performance on green innovation performance, and consequently prioritize ESG management.