Green Finance Policy and ESG Performance: Evidence from Chinese Manufacturing Firms

As an innovative and efficient approach, green finance unlocks the potential to achieve China’s carbon peak and neutrality goals. This study takes China’s Green Finance Pilot Scheme as a quasi-natural experience and adopts the synthetic control method to evaluate the carbon intensity reduction effects of the Green Finance Pilot Policy (GFPP) based on the city-level panel data in China from 2008 to 2019. We find that the GFPP significantly reduces the carbon intensity of pilot cities in eastern China, such as Guangzhou, Huzhou, and Quzhou. However, implementing GFPP does not achieve the desired reduction effect in Nanchang and Guiyang situated in central and western China. After multiple robustness tests, it can be proved that the preceding conclusions are robust. The mechanism analysis results show that the GFPP can promote carbon intensity reduction through financial agglomeration and green innovation. This study is conducive to assessing the policy effectiveness of China’s GFPP and provides empirical evidence for promoting green finance system construction in China.

Section: Discussionmentioning

confidence: 99%

The Impact of Green Finance Pilot Policy on Carbon Intensity in Chinese Cities—Based on the Synthetic Control Method

Feng

Sun

2023

“…Under the concept of green development, heavily polluting enterprises will undoubtedly face more environmental regulations. Due to the regulatory pressure from the government and media, heavily polluting enterprises will be more proactive in strengthening technological innovation to improve environmental management [53]. Additionally, manufacturing polluters are highly sensitive to environmental concerns, so it is simple to elicit a strong response from the market once they communicate green development to the market [54].…”

Section: Analysis Of the Effect Of Contamination Heterogeneitymentioning

confidence: 99%

Environmental, Social, and Governance (ESG) Performance and Firm Value: Evidence from Chinese Manufacturing Firms

Duan,

Yang,

Xiong

2023

In an era of great skepticism and distrust, companies’ ESG performances are under ever-increasing scrutiny. Stakeholders are urging companies to integrate ESG goals into their business strategic plans, practices, and value chains. Drawing upon a sample of publicly listed manufacturing companies in China from 2009 to 2021, this study aims to investigate the relationships between ESG performance and corporate values, especially the mediating role of financing constraints and the moderating effect of R&D investment intensity. Findings show that the ESG performance of manufacturing companies has a significant positive effect on corporate value. Financing constraints play a partial intermediary role between ESG performance and enterprise values. R&D investment intensity negatively moderates the relationship between ESG performance and manufacturing companies’ enterprise values. The heterogeneity study indicates that the beneficial impact of ESG performance on company value is particularly pronounced in the eastern region of China, non-state-owned companies, and heavily polluting industrial enterprises. Our findings provide important practical implications for a range of stakeholders, such as enterprises and investors, and enrich our current understanding of ESG research.

“…Regarding ESG performance, scholars have focused on its economic consequences and influencing factors. Concerning the influencing factors of ESG performance, Sun et al found that the green finance pilot zone policy had a significant and positive impact on firms' ESG performance [36]. Wang D et al argued that the development of financial technology could alleviate corporate financing constraints by reducing transaction costs and information access costs in the financing process, thereby enhancing firms' ESG performance [37].…”

Section: Esg Performancementioning

confidence: 99%

“…Referring to existing studies [36,37,41], this study selects firm size (Size), gearing ratio (Lev), CEO duality (Dual), profitability (Roa), firm growth (Growth), operating cash flow (Cashflow), board size (Board), board independence (Indep), equity concentration (Top1), and the nature of ownership (Soe) as control variables. In addition, this study also controls for the year-fixed effect (Year) and industry-fixed effect (Ind).…”

Section: Other Variablesmentioning

confidence: 99%

Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III

Ling

Zhang

2023

With the growing importance of sustainable development, ESG is receiving attention from governments, firms, and investors. This study uses the reform of China’s tax inspection system—Golden Tax Project III—as a quasi-natural experiment to examine the impact of the enhanced tax administration on firms’ ESG performance with a sample of Chinese A-share listed companies from 2008 to 2020. The findings, which were identified via a time-varying difference-in-differences (time-varying DID) approach, indicate that Golden Tax Project III significantly reduces firms’ ESG performance and has the most significant impact on the environmental dimension and the minor impact on the social dimension. The negative impact of Golden Tax Project III on ESG performance is more substantial among non-state firms and firms in regions with higher levels of marketization than other firms. The mechanism test shows that Golden Tax Project III negatively affects ESG performance by increasing the tax burden on firms. The moderating effect test shows that tax incentives can effectively mitigate the dampening effect of strengthened tax administration on ESG performance. This study enriches the literature on the factors influencing firms’ ESG performance to a certain extent; it helps the government use taxation policies to inspire firms to improve ESG performance, contributing to sustainable development.