Substantial Innovation or Strategic Innovation: The Influence of ESG Performance on Corporate Innovation Strategy

Abstract

The effectiveness of ESG performance in promoting corporate innovation has been widely demonstrated. However, a significant research gap remains unexplored that prior scholars have neglected the research into the influence of ESG performance on corporate innovation strategy. Using the sample of China’s A-share listed companies from 2007 to 2020, this paper analyzes the influence of ESG performance on corporate innovation strategy. It is found that ESG performance can promote substantial innovation and strategic innovation in different degrees. Further analyses show that ESG performance can promote substantial innovation more than strategic one. Therefore, while pursuing upgrading and transformation, corporations should pay more attention to the influence of ESG performance on innovation strategies, and promote a virtuous circle of long-term development of corporations.

Keywords

• esg performance
• substantial innovation
• strategic innovation