Intellectual property protection and corporate ESG performance: evidence from a quasi-natural experiment in China

Purpose Based on strategic choice theory, this study examines the impact and mechanisms of intellectual property demonstration city (IPDC) policy in China on corporate ESG performance. Design/methodology/approach This study uses China’s A-share listed companies’ data from 2009 to 2019 and conducts a difference-in-differences (DID) to explore the causal relationship between IPDC policy and corporate ESG performance. Findings Baseline regression results indicate that the IPDC policy can significantly improve corporate ESG performance. Mechanism tests reveal that the IPDC policy expands firm green technology innovation, enhances firm human capital investment and increases government innovation subsidies, thereby promoting corporate ESG performance. Moderating effect results show that the promotion impact on corporate ESG performance of the IPDC policy is diminished by government fiscal pressure. Heterogeneity analyses indicate that the IPDC policy has a stronger impact on corporate ESG performance in key cities, firms in high-tech industries, firms with a higher reliance on intellectual property protection (IPP) and state-owned enterprises (SOEs). Originality/value The findings enrich the theoretical research on the influencing factors of corporate ESG performance and provide practical references to strengthen IPP and implement a more thorough intellectual property development strategy.