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Can government subsidies improve corporate ESG performance? Evidence from listed enterprises in China

Author

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  • Na, Chaohong
  • Ni, Zhixing
  • Shu, Qiu
  • Zhang, He

Abstract

The corporate environmental, social, and governance (ESG) performance of businesses is crucial for the sustainable development of our evolving global economy. This study analyzes the mechanisms through which government subsidies influence ESG performance in corporations. The findings reveal that government subsidies significantly improve corporate ESG performance. Furthermore, government subsidies enhance corporate innovation investments and mitigate managerial myopia, leading to improved ESG performance in companies. Additional research indicates that in firms with lesser political connections and greater industry competition, the impact of government subsidies in elevating corporate ESG performance is more significant.

Suggested Citation

  • Na, Chaohong & Ni, Zhixing & Shu, Qiu & Zhang, He, 2024. "Can government subsidies improve corporate ESG performance? Evidence from listed enterprises in China," Finance Research Letters, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324004574
    DOI: 10.1016/j.frl.2024.105427
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    References listed on IDEAS

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