Publication date: Jun 06, 2025

This study investigates the impact of transition finance and green technology innovation on corporate level sustainability (measured via ESG scores) using a panel dataset of 23,660 listed firms in China from 2013 to 2022. The use of advanced statistical methods, such as cross-sectional dependence tests, slope heterogeneity tests, second-generation unit root tests, and Sys-GMM estimation, has made this study more robust. The findings indicate that transition finance and green technology innovation are key and decisive for corporate-level sustainability, as they both help to attract investment in decarbonization, sustainable projects, and activities or propose solutions aligned with pressing environmental challenges. To provide more holistic evidence about the drivers influencing corporate level sustainability, the analysis incorporates control variables that underscore the significance of corporate governance, firm efficiency, intellectual capital, firm age, and firm size in fostering sustainability at the corporate level. In addition, firm risk as a control and the Covid-19 pandemic as a shock effect were found to have negative impacts on corporate level sustainability. Bootstrap Quantile-on-quantile regression and D-K fixed effect methods of robustness checks in the end are consistent with the above results. Robustness check validate that the results are reliable and have certain significance for China’s sustainable development. Thus, this study presents results that support organizations in defining strategies for investment in resource allocation. The results highlight the importance of transition financing and green technology innovation and their beneficial effects on corporate level sustainability, which are likely to incentivize organizations to shift their focus and resources to green projects and innovations.

Semantics

Original Article