ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Supply Chain Management
Volume 6 - 2025 | doi: 10.3389/frsus.2025.1642317
Intersection of ESG Performance and Corporate Innovation: A Perspective of Vertical Linkages within the Industrial Chain
Provisionally accepted
- 1Nanjing University of Science and Technology, Nanjing, China
- 2North China University of Water Resources and Electric Power, Zhengzhou, China
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Abstract: Developing a more innovative industrial and supply chain is a critical strategic objective outlined in China's 14th Five-Year Plan and beyond. This study examines data from Chinese A-share listed companies between 2009 and 2022, focusing on the ESG (Environmental, Social, and Governance) performance of firms, their suppliers, and their customers to investigate the connection between "corporate ESG performance and innovation in supplier-customer firms" from a supply chain perspective. The findings demonstrate that corporate ESG performance exerts a spillover effect throughout the supply chain. Firms with higher ESG ratings are linked to enhanced innovation quality among customer firms, particularly evidenced by a notable increase in patent citations, with a regression coefficient of 0.045 (t=2.45). However, no significant improvement is observed in the quality of supplier firms. Mechanism tests indicate that firms elevate their customers' innovation quality through ESG spillovers, innovation spillovers, and increased supply chain efficiency. Specifically, the regression coefficients for financing constraints and agency costs are -0.006 (t=-2.56) and -0.002 (t=-2.12), respectively. Moreover, heterogeneity tests are conducted considering factors like client market influence, industry differences, factor intensity heterogeneity, the number of bank branches near the firm, and the geographic distance between firms and their customers. These analyses further explore the divergence effect of corporate ESG, revealing that variations in ESG ratings diminish the spillover effect. The findings offer valuable insights into corporate innovation and supply chain collaboration, suggesting new policy directions for improving supply chain integration and innovation in China.
Keywords: ESG performance, Corporate innovation, Supply Chain Spillover Effects, Industrial chain, supply chain
Received: 06 Jun 2025; Accepted: 08 Sep 2025.
Copyright: © 2025 Zhu, Xu and Li. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Xiaodong Li, North China University of Water Resources and Electric Power, Zhengzhou, China
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