ESG Performance,External Governance Environment And Enterprise Innovation

At present,our economy has entered a phase of transformation to high-quality development,sustainable development strategy is gradually recognized by the society and the government,people no longer only pay attention to the economic performance of enterprises,but also pay more attention to the environmental responsibility,social responsibility and corporate governance responsibility borne by enterprises.In this context,the concept of ESG emerged and attracted much attention.More and more investors began to regard the performance of ESG as one of the important indicators to measure the sustainable development of enterprises.In order to conform to the trend of The Times,ensure the sustainable development of enterprises and improve the performance of ESG has become the common goal of enterprises.At the same time,innovation ability has become an important driving force to stimulate China’s economic development.The accelerated process of economic globalization and regional integration makes the competition more intense.Enterprises must rely on innovation ability in order to maintain competitiveness in the market.Enterprise ESG performance can influence the formulation of enterprise operation strategy,and further influence the input and output of enterprise innovation.Therefore,it is of great theoretical and practical significance to study the relationship between firm ESG performance and firm innovation.Based on the above background,from the perspective of external governance environment,the relationship between ESG performance and enterprise innovation is examined.Firstly,relevant literature on external governance environment,enterprise ESG performance and enterprise innovation is reviewed and summarized,and the hypothesis of this paper is established on the basis of relevant theories such as principal-agent.Then,an empirical analysis is conducted on China’s A-share listed companies from 2009 to 2021 to explore the impact of ESG performance on enterprise innovation,and further analyze the internal mechanism of the relationship between them and the moderating role of external governance environment.At the same time,instrumental variable method and quantile regression method are used to test robustness.The main conclusions of this paper are as follows:First,good enterprise ESG performance can promote the improvement of enterprise innovation level.This is because the practice of ESG concept conforms to the social sustainable development concept,improves the reputation and image of the enterprise,wins the recognition and trust of stakeholders,and can obtain more capital and technical support in innovation.Second,market competition and media supervision in the external governance environment will enhance the positive impact of ESG performance on enterprise innovation.When the degree of market competition is high,the possibility of bankruptcy liquidation threat is increased,and enterprises with good ESG performance are more likely to get the trust of stakeholders and government support,which is conducive to enterprise innovation.Media supervision will force corporate shareholders to improve corporate governance behavior,improve corporate information transparency,and enhance the positive impact of ESG performance on corporate innovation through supervision mechanism and reputation mechanism.Third,agency costs and financing constraints play an intermediary role in the positive correlation between ESG performance and firm innovation,that is,good ESG performance can promote the improvement of firm innovation level by reducing firm agency costs and easing firm financing constraints.