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ESG performance and innovation quality

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  • Li, Yanqiong
  • Li, Sihao

Abstract

Using a sample of Chinese A-share listed firms from 2009 to 2020, we examine the impact of a firm's environmental, social and governance (ESG) performance on its innovation quality. Our findings suggest that better ESG performance contributes to higher innovation quality. This conclusion remains unchanged after a series of robustness tests. Additional analysis shows that when a firm has a good internal control or a high risk-tolerance, the impact of ESG performance on innovation quality is more pronounced. Finally, we find that better ESG performance also brings higher patent value to a firm. Our results provide policy guidance on promoting ESG and high-quality innovation of firms.

Suggested Citation

  • Li, Yanqiong & Li, Sihao, 2024. "ESG performance and innovation quality," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1361-1373.
    • Handle: RePEc:eee:reveco:v:92:y:2024:i:c:p:1361-1373
    DOI: 10.1016/j.iref.2024.02.063
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    Cited by:

    1. Li Ren & Yanping Cheng, 2024. "The Impact and Mechanism of ESG Performance on Corporate Continuous Innovation: Evidence from China," Sustainability, MDPI, vol. 16(17), pages 1-22, September.

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