The improvement of the social credit environment and corporate ESG performance - evidence from the "construction of china's social credit system"

Abstract

This article explores the influence of the social credit environment on corporate ESG performance in China. By analyzing the impact of China's initiative to build pilot cities for the social credit system, the study introduces a unique approach to assessing corporate sustainability. Findings indicate a positive relationship between an enhanced social credit environment and superior corporate ESG performance. This relationship is notably stronger among NSOEs and in limited marketization regions, highlighting the significant role of the social credit system in fostering corporate sustainability practices. The study's insights contribute to the discourse on the interplay between societal factors and corporate governance.