A long-standing issue that impedes organizational innovation and development is a lack of sufficient financial security. Businesses suffer from constrained development as a result, and their edge over competitors in the market is lost. This study investigates the connections between green technology innovation (GTI), environment, social and governance (ESG) performance, and financial access. According to the study's findings, businesses with strong ESG practices may foster the growth of their GTI, preserving their competitive advantages and advancing the long-term sustainable development of their businesses. The findings of the investigation indicate that a favorable relationship between improved corporate value and GTI and strong ESG performance may exist through a funding mechanism. It is further established that companies that value ESG performance have better GTI potential, gain rare core competitiveness, and further enhance corporate value while maintaining competitive advantages. Based on these results, the study recommends that commercial enterprises pay attention to the needs of corporate stakeholders and formulate detailed ESG action plans. The company's development strategy should consider ESG performance, and management should consider tightly tying ESG initiatives to GTI. The government ought to make an effort to give businesses the necessary financial backing, policy direction, and incentives.
Abdullah, M., Zailani, S., Iranmanesh, M., & Jayaraman, K. (2016). 1.1-Barriers to green innovation initiatives among manufacturers: The Malaysian case. Review of Managerial Science, 10(4), 683–709.
Ahmed, S. U., Ahmed, S. P., & Hasan, I. (2018). Why banks should consider ESG risk factors in bank lending? Banks & Bank Systems, 13(3), 71–80.
Alharbi, R., Yahya, S., & Ahmed, E. (2018). Characteristics of manager’s and SMEs performance: The role of access to finance as a moderator. International Journal of Engineering and Technology, 7, 5115–5119.
Bai, X., Han, J., Ma, Y., & Zhang, W. (2022). ESG performance, institutional investors’ preference and financing constraints: Empirical evidence from China. Borsa Istanbul Review, 22, S157–S168.
Balachandran, B., & Faff, R. (2015). Corporate governance, firm value and risk: Past, present, and future. Pacific-Basin Finance Journal, 35, 1–12.
Beladi, H., Deng, J., & Hu, M. (2021). Cash flow uncertainty, financial constraints and R&D investment. International Review of Financial Analysis, 76, 101785.
Bostan, I., & Spatareanu, M. (2018). Financing innovation through minority acquisitions. International Review of Economics & Finance, 57, 418–432.
Brown, J. R., Fazzari, S. M., & Petersen, B. C. (2009). Financing innovation and growth: Cash flow, external equity, and the 1990s R&D boom. The Journal of Finance, 64(1), 151–185.
Brown, J. R., Martinsson, G., & Petersen, B. C. (2012). Do financing constraints matter for R&D? European Economic Review, 56(8), 1512–1529.
Chang, K., Cheng, X., Wang, Y., Liu, Q., & Hu, J. (2023). The impacts of ESG performance and digital finance on corporate financing efficiency in China. Applied Economics Letters, 30(4), 516–523.
Cin, B. C., Kim, Y. J., & Vonortas, N. S. (2017). The impact of public R&D subsidy on small firm productivity: Evidence from Korean SMEs. Small Business Economics, 48(2), 345–360.
Cohen, G. (2023). The impact of ESG risks on corporate value. Review of Quantitative Finance and Accounting, 60(4), 1451–1468.
Cornell, B. (2020a). ESG preferences, risk and return. European Financial Management, 27(1), 12–19.
Cornell, B. (2020b). ESG preferences, risk and return. European Financial Management, 27.
Dangelico, R. M., Pujari, D., & Pontrandolfo, P. (2017). Green product innovation in manufacturing firms: A sustainability-oriented dynamic capability perspective. Business Strategy and the Environment, 26(4), 490–506.
Dyck, A., Lins, K. V., Roth, L., & Wagner, H. F. (2019). Do institutional investors drive corporate social responsibility? International evidence. Journal of Financial Economics, 131(3), 693–714.
El Ghoul, S., Guedhami, O., Kwok, C. C. Y., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388–2406.
Gigante, G., & Manglaviti, D. (2022). The ESG effect on the cost of debt financing: A sharp RD analysis. International Review of Financial Analysis, 84, 102382.
Goss, A., & Roberts, G. S. (2011). The impact of corporate social responsibility on the cost of bank loans. Journal of Banking & Finance, 35(7), 1794–1810.
Griliches, Z. (1981). Market value, R&D, and patents. Economics Letters, 7(2), 183–187.
Haš?i?, I., & Migotto, M. (2015). Measuring environmental innovation using patent data.
Hsu, P.-H., Tian, X., & Xu, Y. (2014). Financial development and innovation: Cross-country evidence. Journal of Financial Economics, 112(1), 116–135.
Huang, J.-W., & Li, Y.-H. (2017). Green innovation and performance: The view of organizational capability and social reciprocity. Journal of Business Ethics, 145(2), 309–324.
Huang, Z., Liao, G., & Li, Z. (2019). Loaning scale and government subsidy for promoting green innovation. Technological Forecasting and Social Change, 144, 148–156.
Jiao, J., Zhang, X., & Tang, Y. (2020). What factors determine the survival of green innovative enterprises in China? -- A method based on fsQCA. Technology in Society, 62, 101314.
Kelley, D. J., Singer, S., & Herrington, M. (2012). Global entrepreneurship monitor 2011 global report.
Kim, S., & Li, Z. (Frank). (2021). Understanding the impact of ESG practices in corporate finance. Sustainability, 13(7), 3746.
Kuo, T.-C., & Smith, S. (2018). 2-A systematic review of technologies involving eco-innovation for enterprises moving towards sustainability. Journal of Cleaner Production, 192, 207–220.
Li, J., & Lin, B. (2016). Green economy performance and green productivity growth in China’s cities: Measures and policy implication. Sustainability, 8(9), 947.
Liu, J. (2022). Research on the influence mechanism of carbon information disclosure quality on corporate value creation based on ESG concept (PhD Thesis). Hefei University of Technology.
Onileowo, T. T., Muharam, F. M., Ramily, M. K., & Khatib, S. F. A. (2021). The nexus between innovation and business competitive advantage: A conceptual study. Universal Journal of Accounting and Finance, 9(3), 352–361.
Raimo, N., Caragnano, A., Zito, M., Vitolla, F., & Mariani, M. (2021). Extending the benefits of ESG disclosure: The effect on the cost of debt financing. Corporate Social Responsibility and Environmental Management, 28(4), 1412–1421.
Rennings, K., Ziegler, A., Ankele, K., & Hoffmann, E. (2006). The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance. Ecological Economics, 57(1), 45–59.
Richardson, B. J. (2009). Keeping ethical investment ethical: Regulatory issues for investing for sustainability. Journal of Business Ethics, 87(4), 555–572.
Ross, S. A. (1977). The determination of financial structure: The incentive-signalling approach. The Bell Journal of Economics, 8(1), 23–40.
Sun, H., Edziah, B. K., Sun, C., & Kporsu, A. K. (2019). Institutional quality, green innovation and energy efficiency. Energy Policy, 135, 111002.
Tang, H. (2022). The effect of ESG performance on corporate innovation in China: The mediating role of financial constraints and agency cost. Sustainability, 14(7), 3769.
Tarmuji, I., Maelah, R., & Tarmuji, N. H. (2016). The impact of environmental, social and governance practices (ESG) on economic performance: Evidence from ESG score. International Journal of Trade, Economics and Finance, 7(3), 67–74.
Wang, N., Pan, H., Feng, Y., & Du, S. (2023). How do ESG practices create value for businesses? Research review and prospects. Sustainability Accounting, Management and Policy Journal, ahead-of-print(ahead-of-print).
Wolff, G. B., & Reinthaler, V. (2008). The effectiveness of subsidies revisited: Accounting for wage and employment effects in business R&D. Research Policy, 37(8), 1403–1412.
Xiang, X., Liu, C., & Yang, M. (2022). Who is financing corporate green innovation? International Review of Economics & Finance, 78, 321–337.
Zhai, Y., Cai, Z., Lin, H., Yuan, M., Mao, Y., & Yu, M. (2022). Does better environmental, social, and governance induce better corporate green innovation: The mediating role of financing constraints. Corporate Social Responsibility and Environmental Management, 29(5), 1513–1526.
Zhang, F., Qin, X., & Liu, L. (2020). The interaction effect between ESG and green innovation and its impact on firm value from the perspective of information disclosure. Sustainability, 12(5), 1866.
Zhang, J., & Liu, Z. (2023). Study on the impact of corporate ESG performance on green innovation performance—evidence from listed companies in China A-Shares. Sustainability, 15(20),14750.
Zhou, J., Lei, X., & Yu, J. (2024). ESG rating divergence and corporate green innovation. Business Strategy and the Environment, 33(4), 2911–2930.
Wu, X., Bajuri, N. H., Khatib, S. F. A., & Zhang, Y. (2024). The Nexus Between ESG Performance and Green Technology Innovation: A Conceptual Study. International Journal of Academic Research in Business and Social Sciences, 14(12), 2029–2038.
Copyright: © 2024 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode