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Local green finance policies and corporate ESG performance

Local green finance policies and corporate ESG performance Based on China's government‐business relations theory, we use difference‐in‐differences and causal forest to find that local green finance policies can significantly enhance corporate ESG performance especially for nonstate‐owned companies, companies with high levels of executive social capital, non‐heavily polluting companies, and companies in developed regions. We also find that the corporate financing constraint mitigation effect and the regional environmental regulation effect of local green finance policies are important mechanisms for promoting corporate ESG performance. Additionally, local green finance policies can strengthen the positive role of corporate ESG performance in enhancing corporate value, which is conducive to corporate sustainability. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Review of Finance Wiley

Local green finance policies and corporate ESG performance

Xue, Qihang; Wang, Huimin; Bai, Caiquan
International Review of Finance , Volume Early View – May 22, 2023
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29 pages

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Publisher
Wiley
Copyright
© 2023 International Review of Finance Ltd.
ISSN
1369-412X
eISSN
1468-2443
DOI
10.1111/irfi.12417
Publisher site
See Article on Publisher Site

Abstract

Based on China's government‐business relations theory, we use difference‐in‐differences and causal forest to find that local green finance policies can significantly enhance corporate ESG performance especially for nonstate‐owned companies, companies with high levels of executive social capital, non‐heavily polluting companies, and companies in developed regions. We also find that the corporate financing constraint mitigation effect and the regional environmental regulation effect of local green finance policies are important mechanisms for promoting corporate ESG performance. Additionally, local green finance policies can strengthen the positive role of corporate ESG performance in enhancing corporate value, which is conducive to corporate sustainability.

Journal

International Review of Finance – Wiley

Published: May 22, 2023

Keywords: causal forest; corporate ESG performance; difference‐in‐differences; government‐business relations; local green finance policies

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