TY - JOUR
T1 - Corporate Innovation and ESG Performance
T2 - The Role of Government Subsidies
AU - Liu, Zhenyu
AU - Chen, Lingling
AU - Jiang, Haocheng
AU - Yan, Zengwen
AU - Li, Taiyu
N1 - Publisher Copyright:
© 2025
PY - 2025/3/4
Y1 - 2025/3/4
N2 - This study investigates the impact of corporate innovation on Environmental, Social, and Governance (ESG) performance, analyzing the potential role of government subsidies, debt financing costs, corporate loans, and the nature of corporate ownership in this relationship. Using the data from Shenzhen A-share listed companies, excluding ST stocks and the financial sector, from 2014 to 2021, this study examines the relationship between the number of patents as a proxy variable for innovation capability and ESG performance through multiple regression analysis. It is found that there is a significant positive correlation between corporate innovation and ESG performance, indicating that firms’ innovation activities can improve their ESG performance. Moreover, corporate innovation increases government subsidies and lowers debt financing costs, promoting ESG performance. “Innovation level improvement → Increased government subsidies → Reduced debt financing costs → Improved ESG performance” is the chain mediation mechanism that underlies this impact. In addition, state-owned enterprises and firms with significant borrowing can benefit from the enhanced impact of innovation on ESG performance. This study offers new perspectives on how companies can leverage innovation to improve ESG performance and provides a reference for companies and policymakers regarding innovation and sustainable development.
AB - This study investigates the impact of corporate innovation on Environmental, Social, and Governance (ESG) performance, analyzing the potential role of government subsidies, debt financing costs, corporate loans, and the nature of corporate ownership in this relationship. Using the data from Shenzhen A-share listed companies, excluding ST stocks and the financial sector, from 2014 to 2021, this study examines the relationship between the number of patents as a proxy variable for innovation capability and ESG performance through multiple regression analysis. It is found that there is a significant positive correlation between corporate innovation and ESG performance, indicating that firms’ innovation activities can improve their ESG performance. Moreover, corporate innovation increases government subsidies and lowers debt financing costs, promoting ESG performance. “Innovation level improvement → Increased government subsidies → Reduced debt financing costs → Improved ESG performance” is the chain mediation mechanism that underlies this impact. In addition, state-owned enterprises and firms with significant borrowing can benefit from the enhanced impact of innovation on ESG performance. This study offers new perspectives on how companies can leverage innovation to improve ESG performance and provides a reference for companies and policymakers regarding innovation and sustainable development.
KW - Corporate innovation
KW - Corporate loan
KW - Debt financing costs
KW - ESG performance
KW - Government subsidies
KW - State-owned enterprise
UR - http://www.scopus.com/inward/record.url?scp=86000288252&partnerID=8YFLogxK
U2 - 10.1016/j.jclepro.2025.145209
DO - 10.1016/j.jclepro.2025.145209
M3 - Article
AN - SCOPUS:86000288252
SN - 0959-6526
VL - 498
JO - Journal of Cleaner Production
JF - Journal of Cleaner Production
M1 - 145209
ER -
