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Green finance policies, financing constraints and corporate ESG performance: insights from supply chain management

Author

Listed:
  • Jiazhan Gao

    (Nanjing Normal University
    Jiangsu Normal University
    Nanjing Normal University Business School)

  • Guihong Hua

    (Nanjing Normal University)

  • Baofeng Huo

    (Zhejiang University)

Abstract

Green finance represents an innovative policy framework aimed at fostering corporate engagement in ESG practices. Drawing on data from Chinese A-share listed companies between 2007 and 2021, this study leverages the 2016 "Guiding Opinions on Building a Green Financial System" as a quasi-experimental setting. By employing a continuous double-difference model, we rigorously investigate the influence of green finance policies (GFP) on corporate ESG performance and elucidate the underlying mechanisms. The findings demonstrate a substantial improvement in corporate ESG outcomes attributable to GFP; however, this effect exhibits variability, influenced by the extent of corporate supply chain finance and the transparency of supply chain operations. Detailed mechanism analysis reveals that GFP impacts ESG performance through the reinforcement of external financing constraints, enhancement of internal supply chain efficiency, and reduction of managerial power. Heterogeneity analysis highlights differential impacts on firms based on regional characteristics, particularly in areas with high urban innovation, stringent environmental regulations, and advanced supply chain digitization. Therefore, refining the GFP framework is imperative, emphasizing the understanding of corporate behavior in shaping policy effectiveness, ultimately steering companies toward sustainable development. This study contributes to the theoretical discourse on GFP and their implications for corporate ESG performance, while providing actionable insights for policy optimization.

Suggested Citation

  • Jiazhan Gao & Guihong Hua & Baofeng Huo, 2024. "Green finance policies, financing constraints and corporate ESG performance: insights from supply chain management," Operations Management Research, Springer, vol. 17(4), pages 1345-1359, December.
    • Handle: RePEc:spr:opmare:v:17:y:2024:i:4:d:10.1007_s12063-024-00509-w
    DOI: 10.1007/s12063-024-00509-w
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