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Local government debt pressure and corporate ESG performance: Empirical evidence from China

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  • Nie, Song
  • Liu, Junxian
  • Zeng, Gang
  • You, Jiyuan

Abstract

This paper is the first to incorporate local government debt pressure, government behaviors and corporate ESG performance into analytical framework. Using the comprehensive data of government debt and Chinese listed companies from 2015 to 2020, we find the negative correlation between debt pressure and corporate ESG performance. Furthermore, the adverse influence of debt pressure on corporate ESG performance is markedly pronounced in state-owned companies, companies with elevated political relevance, and companies situated in the inland and northern regions of China. The study also reveals that debt pressure weak ESG performance by aggravating financial constraints and diminishing the capacity for green innovation.

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  • Nie, Song & Liu, Junxian & Zeng, Gang & You, Jiyuan, 2023. "Local government debt pressure and corporate ESG performance: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007882
    DOI: 10.1016/j.frl.2023.104416
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    2. Bing He & Cancan Ma, 2024. "Can the Inclusiveness of Foreign Capital Improve Corporate Environmental, Social, and Governance (ESG) Performance? Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-16, November.
    3. Chenhui Lu & Caitian Wu & Linjie Feng & Jinghui Zhan & Yi Shi & Huangxin Chen, 2025. "Does ESG Performance Enhance Corporate Green Technological Innovation? Micro Evidence from Chinese-Listed Companies," Sustainability, MDPI, vol. 17(2), pages 1-25, January.
    4. Zhu, Ruoyu & Tan, Kehu & Xin, Xiaohui, 2024. "Speed up for sustainable development: High-speed rail and corporate ESG performance," Energy Economics, Elsevier, vol. 138(C).
    5. Ji, Qiang & Nie, Song, 2024. "How does local government fiscal pressure affect corporate ESG performance?," Finance Research Letters, Elsevier, vol. 64(C).
    6. Hanjin Xie & Fengquan Wu, 2025. "Artificial Intelligence Technology and Corporate ESG Performance: Empirical Evidence from Chinese-Listed Firms," Sustainability, MDPI, vol. 17(2), pages 1-20, January.
    7. Yan Ma & Pei Liu & Haonan Chen, 2024. "Corporate ESG Performance, Green Innovation, and Green New Quality Productivity: Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-21, November.
    8. Zhang, Cheng & Yu, JiaQi & Bai, Yiyi & Ho, Kung-Cheng, 2024. "The impact of CEO's green experience on digital transformation," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    9. Jiang, Fuxiu & Shen, Yanyan & Wang, Xue, 2024. "Multiple large shareholders and analyst activities," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    10. Tingting Hu & Kun You & Char-Lee Lok, 2025. "State ownership, political connection and ESG performance," Risk Management, Palgrave Macmillan, vol. 27(1), pages 1-33, January.

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