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Does Fintech Development Enhance Corporate ESG Performance? Evidence from an Emerging Market

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  • Deli Wang

    (School of Accounting, Guangdong University of Foreign Studies, 178 Waihuan East Road, Panyu District, Guangzhou 510006, China
    Research Center for Guangdong-Hong Kong-Macao Greater Bay Area Accounting and Economic Development, Guangdong University of Foreign Studies, 178 Waihuan East Road, Panyu District, Guangzhou 510006, China)

  • Ke Peng

    (School of Accounting, Guangdong University of Foreign Studies, 178 Waihuan East Road, Panyu District, Guangzhou 510006, China)

  • Kaiye Tang

    (School of Accounting, Guangdong University of Foreign Studies, 178 Waihuan East Road, Panyu District, Guangzhou 510006, China)

  • Yewei Wu

    (School of Economics and Management, Tongji University, 1239 Siping Road, Yangpu District, Shanghai 200092, China)

Abstract

The effectiveness of environmental, social, and governance (ESG) has been widely discussed and is often linked to corporate sustainability strategies. However, corporate ESG performance cannot be achieved without the support of financial development and the underlying mechanisms through which fintech development affects corporate ESG performance in emerging markets remain unexplored. Firms that are less financially constrained exhibit higher ESG performance in cities with better developed fintech. Moreover, the results remain robust after addressing the endogeneity between fintech development and ESG performance and using different city-level fintech indexes. Additionally, the results remain robust after addressing the endogeneity between fintech development and ESG performance and using different model specifications and variable measurement. Heterogeneity analysis suggests that the effect of fintech development on ESG performance is stronger for firms that are small, operate in technology industries, and have financial executives. These findings provide new insights into the role of fintech development in promoting sustainable social and economic development.

Suggested Citation

  • Deli Wang & Ke Peng & Kaiye Tang & Yewei Wu, 2022. "Does Fintech Development Enhance Corporate ESG Performance? Evidence from an Emerging Market," Sustainability, MDPI, vol. 14(24), pages 1-21, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:24:p:16597-:d:1000167
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    6. Sang, Yuli & Xie, Mingjian & Bai, Xiaolong & Guo, Fusen, 2024. "Does natural resource dependence influence the impact of financial technologies on corporate ESG and digital governance in China's listed enterprises?," Resources Policy, Elsevier, vol. 91(C).
    7. Mertzanis, Charilaos, 2023. "FinTech finance and social-environmental performance around the world," Finance Research Letters, Elsevier, vol. 56(C).
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    9. Yunfu Zhu & Haoling Yang & Ma Zhong, 2023. "Do ESG Ratings of Chinese Firms Converge or Diverge? A Comparative Analysis Based on Multiple Domestic and International Ratings," Sustainability, MDPI, vol. 15(16), pages 1-17, August.

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