Abstract
This paper is the first to incorporate local government debt pressure, government behaviors and corporate ESG performance into analytical framework. Using the comprehensive data of government debt and Chinese listed companies from 2015 to 2020, we find the negative correlation between debt pressure and corporate ESG performance. Furthermore, the adverse influence of debt pressure on corporate ESG performance is markedly pronounced in state-owned companies, companies with elevated political relevance, and companies situated in the inland and northern regions of China. The study also reveals that debt pressure weak ESG performance by aggravating financial constraints and diminishing the capacity for green innovation.
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