The value of “green label”: green factory and corporate ESG performance

ABSTRACT

Green manufacturing and corporate ESG performance are two vital issues related to sustainable development. Utilizing manually collated data of green factory, publicly listed company data and corporate ESG scores disclosed by the Bloomberg database, this paper adopts a difference-in-difference approach to explore the impact of green manufacturing on corporate ESG performance. The empirical results demonstrate that green manufacturing significantly enhances corporate ESG performance by expanding green investment and alleviating financing constraints. Further analysis indicates that green manufacturing plays a more crucial role in improving corporate environmental performance and social responsibility. The findings offer valuable insights for refining government environmental regulatory tools and for corporations aiming to enhance their ESG performance.

KEYWORDS:

• Green factory
• corporate ESG performance
• green investment
• financing constraints

JEL CLASSIFICATION:

• Q01
• Q56
• Q58

Acknowledgement

The paper is supported by the National Social Science Foundation of China (No: 23AJY010), the National Social Science Foundation of China (No: 22BJL075), the MOE (Ministry of Education in China) Project of Humanities and Social Sciences (No: 23YJC790009), the China Postdoctoral Science Foundation (No: 2022M723541), and the Fujian Social Science Planning Fund Project (No: FJ2023A010).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/13504851.2024.2332542

Notes

¹ The results of the parallel trend tests for the three dimensions of ESG (Environmental, Social, Governance) are detailed in Figures A1, A2, and A3 in Appendix.

Additional information

Funding

This work was supported by the the National Social Science Foundation of China [No: 23AJY010]; the National Social Science Foundation of China [No: 22BJL075]; the Fujian Social Science Planning Fund Project [No: FJ2023A010]; the China Postdoctoral Science Foundation [No: 2022M723541]; the MOE (Ministry of Education in China) Project of Humanities and Social Sciences [No: 23YJC790009].