ESG performance and the persistence of green innovation: empirical evidence from Chinese manufacturing enterprises

Purpose This paper aims to investigate the actual impact, mechanism and internal and external environmental adjustment effect of ESG performance on the persistence of green innovation using data from China’s A-share manufacturing listed companies from 2009 to 2021. Design/methodology/approach Panel data regression models are used to explore the effect of ESG performance of manufacturing enterprises on the persistence of green innovation. To examine the mechanism of ESG performance affecting the persistence of green innovation of manufacturing enterprises, this paper refers to the research of Wen and Ye (2014) and constructs an analysis framework of intermediary effect. Findings This research was funded by Shandong Provincial Natural Science Foundation, grant number ZR2023MG075 & ZR2024QE171. Research limitations/implications There are a few more limitations to this study that might be discussed from the following angles: first, due to data availability, this paper examines the persistence of green innovation from the output perspective. The authors can expand the data sources in the future and investigate the input-output combinations in green innovation as a means of understanding its sustainability. Second, the mechanism studied in this paper includes management costs, entry of green investors and risk-taking ability. In fact, it is possible that ESG performance influences green innovation persistence in other ways as well; these can be investigated more in the future. Originality/value First, it concentrates on the persistence of green innovation in manufacturing enterprises, surpassing the quantitative aspect and thereby broadening the research scope. Second, by including the “management expense ratio,” “green investor entry” and “risk-taking” as mediating factors, the study delves deeper into the mechanisms through which ESG performance impacts the persistence of green innovation in manufacturing enterprises, further broadening the research scope. Third, this research incorporates the internal and external environments encountered by manufacturing enterprises into the analytical framework to investigate their adjustment effects in the process of ESG performance influencing persistent green innovation, thus widening the research perspective. Fourth, this study introduces the subdimensions of ESG performance, specifically environmental responsibility, social responsibility and corporate governance, and assesses their impacts on the persistence of green innovation in manufacturing enterprises, thus enriching the research narrative.