The Impact of Financial Misallocation on Corporate ESG Performance

Hongli Guo

doi:10.62177/apemr.v2i5.822

Authors

Hongli Guo Yunnan University of Finance and Economics

DOI:

https://doi.org/10.62177/apemr.v2i5.822

Keywords:

Financial Misallocation, Financing Constraints, Green Finance, Supply Chain Concentration, Nature of Ownership

Abstract

Against the strategic backdrop of green finance promoting the achievement of the "dual carbon" goals, enhancing corporate ESG performance has become an important pathway for achieving sustainable development. However, the widespread phenomenon of financial misallocation, particularly the structural imbalance in the allocation of green credit resources, significantly constrains corporate ESG performance. Based on data from China's A-share listed companies from 2009 to 2022, this study examines the impact of financial misallocation on corporate ESG performance. The results indicate that financial misallocation significantly inhibits corporate ESG performance, a conclusion that remains valid after robustness tests. Mechanistically, financial misallocation hinders ESG improvement by exacerbating supply chain concentration, increasing financing costs, and suppressing green innovation. Heterogeneity analysis further reveals that the negative effect of financial misallocation is more pronounced in non-state-owned enterprises with insufficient green finance coverage, high-carbon emission industries, and the western region. This research provides important theoretical support and policy insights for enhancing corporate ESG performance by optimizing the allocation of green financial resources and correcting credit discrimination.

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