Can ESG-Responsible Investing Attract Sovereign Wealth Funds’ Investments? Evidence From Chinese Listed Firms

Environmental, social, and corporate governance (ESG) performance is an analytical framework for measuring the contribution of enterprises to sustainable development and fulfillment of social responsibility. The introduction of an environmental protection tax in China in 2018, which imposes tax on the pollution emission of enterprises, helps enterprises improve their ESG performance and raise their environmental awareness, thus effectively promoting their green technological innovation to achieve sustainable development. This study examines the effect of China’s environmental protection tax on corporate ESG performance and green technology innovation. The findings showed that the environmental protection tax in China can vastly improve the ESG performance and green technological innovation, with the ESG performance exhibiting a partial mediating effect in promoting corporate green technological innovation. The mediating effect in enhancing ESG performance and green technological innovation varies with the nature of firms’ property rights and regions.

Section: Mediating Effectssupporting

confidence: 77%

“…To save the cost of the tax and gain sound political affinity, enterprises will optimize their production process by green transformation, which may improve the environmental and social performance of companies. Therefore, China's environmental protection tax may help firms improve ESG performance (Chen et al, 2022).…”

Section: Introductionmentioning

confidence: 99%

Environmental protection tax, corporate ESG performance, and green technological innovation

2022

“…Second, there are two main approaches to calculating ESG scores. On the one hand, some scholars constructed an ESG index system based on ESG core connotation and market development, and used principal component analysis to measure the ESG index (Bai et al, 2005;Qiu and Yin, 2019;Chen et al, 2022). On the other hand, some professional institutions issued ESG rating databases, such as the ESG rating system of Sino-Securities and the ESG database of Hexun.com.…”

Section: Introductionmentioning

confidence: 99%

Urban digital economy development, enterprise innovation, and ESG performance in China

Chen

Han

2022

Self Cite

This study analyzes the influence of urban digital economy development on enterprise ESG performance in China and its enterprise innovation channels. Based on matching micro-level data of enterprises and macro-level data of prefecture-level cities from 2012 to 2020, this study uses OLS to conduct empirical estimation and uses a multiple mediation effect model to test the influencing mechanism. Our findings demonstrate that the development of an urban digital economy significantly improves enterprise ESG performance in China. Additionally, the development of the digital economy can boost enterprise ESG performance by enhancing innovation input intensity, improving innovation output capacity, and enhancing innovation input intensity to improve innovation output capacity. Furthermore, we find that the development of the digital economy in eastern and northeastern China significantly improves enterprise ESG performance, urban agglomerations play a central role in the process of digital economy development improving enterprise ESG performance, and the development of the digital economy significantly enhances enterprise ESG performance in younger enterprises. Overall, our findings improve and enrich the research on the digital economy and enterprise development from the perspective of micro-enterprises and macro development. Moreover, they provide theoretical support and empirical evidence for the development of the digital economy and the realization of enterprises’ sustainable development.

“…Referring to Qiu and Yin (2019) and Chen et al (2022), we use the corporate environmental performance rules provided by the CSMAR database to construct the first principal component of these three variables. Subsidy i,t represents government environmental subsidies divided by operating revenue.…”

Section: Data Models and Variablesmentioning

confidence: 99%

The impact of environmental subsidy on the performance of corporate environmental responsibility: Evidence from China

Chen

Wei

Zhu³

2022

Self Cite

Corporate environmental responsibility (CER) has become a critical factor for measuring the competitiveness of firms in China, and environmental subsidies may be a catalyst for promoting firms’ CER. This study uses data from Chinese A-share listed firms during 2010–2020. Using the instrumental variable two-stage least squares (IV-2SLS) method, we found that environmental subsidies significantly improve corporate environmental performance but have no significant impact on the disclosure and governance of pollution emissions. We find that environmental subsidies are better for chemical and energy firms with high pollution levels, provide incentives for non-state-owned firms to improve CER and that their effect in western and eastern China is better than that in the central region. We also found that corporate social responsibility plays a moderating role in environmental subsidies that affect CER. Finally, this study finds that environmental subsidies may crowd out corporate investments to improve environmental performance. Based on the above results, we provide the corresponding policy suggestions.