Transformations  in
Business & Economics

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG), FINANCING CONSTRAINTS, AND ENTERPRISE VALUE¹⁶
Yunchao Du, Jindan Zhang, Haoying Deng

ABSTRACT: Environmental, social and governance (ESG) performance has attracted increasing attention. ESG represents important indicators for measuring the green management concept of enterprises and promoting high-quality economic development and sustainable development ability. To discuss the relationship between ESG, financing constraints and enterprise value, based on resource dependence and financing constraint theory, using the data of new energy enterprises in A-share listed companies in Shanghai and Shenzhen stock markets from 2017 to 2021 in China, the effect of ESG on enterprise value, and the moderating role of financing constraints in the impact relationship were analyzed. Furthermore, the heterogeneity of regional location, enterprise ownership, and pollution degree were discussed. Results show that, good ESG performance can significantly improve the value of new energy enterprises. However, financing constraints hinder the value of these enterprises, and financing constraints inhibit the positive role of ESG performance in promoting enterprise value to a certain extent. ESG performance is prominent in new energy enterprises in the eastern and southern regions, among state-owned enterprises, and firms with heavy pollution. Conclusions provide empirical evidence for the development of enterprises through ESG performance, and have certain reference significance for the government, investors, and enterprises, allowing them to attach importance to ESG performance, strengthen and improve financing, and promote the development of enterprises.

KEYWORDS:  : ESG, financing constraint, enterprise value, new energy enterprise

JEL classification:  D24, G32, M14.

¹⁶Acknowledgments:  This study was supported by the Joint Funds of the Zhejiang Provincial Natural Science Foundation of China (No. LQ21G020001), Zhejiang Soft Science Research Program (No. 2023C35112), National Statistical Science Research Program of China (No. 2022LY069) and Major project of the Key Research Base of Humanities and Social Sciences of the Ministry of Education in 2022 (No.22JJD880036).