Title: ESG ratings and innovation performance of listed companies in China - based on tests of mediating and regulating effects

Authors: Mingran Wu; Xiangyi Zhang

Addresses: School of Management, Nanjing University of Posts and Telecommunications, Nanjing 210003, China; School of Management and Engineering, Nanjing University, Nanjing 210093, China ' School of Public Administration, Nanjing Normal University, Nanjing 210023, China

Abstract: This paper empirically examines the impact of ESG ratings on the innovation performance of Chinese listed companies from 2010 to 2022. The results show that improvements in the ESG ratings are significantly beneficial to the innovation performance of enterprises in the next year. Moreover, corporation age, power concentration, liquidity, the proportion of independent directors, the leverage ratio and the book-to-market value are conducive to the adjustment effect of ESG ratings. Especially, corporate profitability can play a positive mediating role, but corporate growth plays a negative role. Furthermore, competitive level actively enhances the innovation performance and profitability of enterprises. However, the pursuit of high ESG scores can incentivise monopolistic enterprises to innovate. In addition, the marginal effect of ESG investment on polluting enterprises is stronger than that on clean enterprises and that the effect on private enterprises is stronger than that on government-owned enterprises.

Keywords: ESG; listed company; innovation; financial performance; market competition degree; China.

DOI: 10.1504/IJTM.2025.151902

International Journal of Technology Management, 2025 Vol.99 No.1/2, pp.94 - 126

Received: 08 Feb 2025
Accepted: 15 Oct 2025
Published online: 25 Feb 2026 *

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