How ESG Rating Can Achieve"Incremental Quality Improvement"in Corporate Green Innovation
Green development is the only way to solve the problem of sustainable economic and environmental develop-ment and build a beautiful China.Enterprises are active practitioners of green development,and green innovation is not only a key driving force to lead the green development of enterprises,but also a key measure to solve the dilemma of coordinated development of economy and environment.Different from the government's hard regulation,that is,the study of environ-mental regulation on enterprises'green innovation behavior,the pressure generated by market soft regulation is often more normative.With the help of external market power,enterprises are encouraged to make decisions according to the actual situ-ation,resulting in the effect of"reinforcing strengths and compensating weaknesses",and thus better exerting the market's right of correction.As an important decision of enterprises,green innovation is closely linked to the three indicators of ESG,and corporate green innovation is the embodiment of the comprehensive governance effect of ESG rating.The ESG rating of SynTao Green Finance is regarded as the external impact of market soft regulation,because SynTao Green Finance ESG rat-ing aims to provide accurate information for financial enterprises and investors,which can effectively avoid interest prob-lems with enterprises and ensure independence.At the same time,its authority has been recognized by the market,SynTao Green Finance rating is the earliest adoption of global standards,SynTao Green Finance ESG rating is easier to gain investor trust and attention.Secondly,the ESG aims to provide investors with accurate information,rather than to encourage enter-prises'green innovation behavior,which ensures the externality.In view of this,different from the study on formal environ-mental regulation forcing enterprises to innovate green by hard regulation,this paper focuses on the impact of soft market regulation on enterprises'innovation green.Different from previous studies that used invention patents or R&D investment to measure enterprises'green innovation,the number of green patent applications is used to represent the number of enter-prises'green innovation.The number of green patent citations in 5 years was used to measure the quality of green innova-tion.Based on the data of A-share listed companies from 2010 to 2021,this paper considers the exogenous impact of ESG rating announced by SynTao Green Finance for the first time as a quasi-natural experiment,and uses the multi-time-point dif-ferential model to empirically test the effect and internal path of ESG rating on enterprise green innovation.The findings are as follows:(1)ESG rating can achieve"incremental quality improvement"of enterprise green innovation,and the conclu-sion is still valid after robustness test.(2)ESG rating affects enterprise green innovation mainly through the internal path of easing financing constraints,principal-agent and increasing R&D investment.(3)The impact of ESG rating on enterprise green innovation is heterogeneous in terms of industry attributes,enterprise life cycle,enterprise ownership and market atten-tion.For mature enterprises,state-owned enterprises,heavily polluting industries and enterprises with high capital market at-tention,the promotion effect of ESG rating on enterprise green innovation is more obvious.(4)The extended research shows that ESG rating and formal environmental regulations complement each other and play a good role of"complementing weak-nesses";There is a spillover effect on green innovation of other enterprises in the same industry and in the same province.Based on this,it is recommended to actively implement ESG development principles,explore multifaceted pathways for driving corporate green innovation,and formulate targeted strategies in accordance with the specific characteristics of enter-prise development.However,there are still some areas to be improved.On the one hand,limited by secondary data,the depth and accuracy of the research need to be improved,mainly reflected in the fact that the green innovation of enterprises with explained variables cannot fully capture the three-dimensional attributes of ESG.Future studies can evaluate the more direct economic effects caused by ESG rating through experimental methods,questionnaires and other research methods.On the other hand,existing research only examined the impact of third-party ESG rating events on external auditors,and future research can be expanded to include the impact of ESG rating events on other entities,or the impact on other behavioral deci-sions of managers.
ESG ratinggreen innovationquantity of innovationquality of innovationmulti-period DID
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