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ORIGINAL RESEARCH article

Front. Environ. Sci.
Sec. Environmental Economics and Management
Volume 12 - 2024 | doi: 10.3389/fenvs.2024.1469884

How are firms motivated to greenly innovate under the pressure of ESG performance: Evidence from Chinese listed firms

Provisionally accepted
Junliang Liu Junliang Liu 1Bolin Wang Bolin Wang 2*Xiaogang He Xiaogang He 3
  • 1 Fudan University, Shanghai, Shanghai Municipality, China
  • 2 Shanghai Business School, Shanghai, China
  • 3 Shanghai University of Finance and Economics, Shanghai, Shanghai Municipality, China

The final, formatted version of the article will be published soon.

    This paper examines the impact of environmental, social, and governance (ESG) performance gaps on firm green innovation by a panel database of A-share Chinese listed companies from 2011 to 2021.Using multiple linear regression and conducting a series of endogeneity tests and robustness checks, our empirical analysis shows that firm ESG performance gaps have significantly positive effect on green innovation. Both ESG performance below historical aspiration level and social aspiration level enhance a firm's green innovation. Confucian culture negatively moderates the positive relationship between ESG performance gaps and green innovation, suggesting that firms more influenced by Confucian culture exhibit reduced green innovation compared to those less influenced. Additionally, firm digitalization positively moderates the positive relationship between ESG performance gaps and green innovation, indicating that firms with higher levels of digitalization are better equipped to improve green innovation when facing ESG performance shortfalls. This study extends the existing knowledge of firm ESG performance and motivation of green innovation. The research findings offer practical insights for leveraging the motivation and capabilities of green innovation to attain firm ESG objectives.

    Keywords: ESG performance aspiration, green innovation, BTOF, Confucian culture, digitalization

    Received: 24 Jul 2024; Accepted: 25 Sep 2024.

    Copyright: © 2024 Liu, Wang and He. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Bolin Wang, Shanghai Business School, Shanghai, China

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.