Environment, Social, and Governance Performance and Enterprise Innovation Capacity : A Study of the Top 100 Global Hi-Tech firms

Sustainable finance has gained much traction in recent years and considerable literature has emerged around the influence of an enterprise’s Environment, Social, and Governance (ESG) performance on financial performance. However, the present study contributes to this “doing well by doing good” debate by exploring the impact of ESG performance on a firm’s innovation capacity through the lens of resource-based-view and stakeholders theory. We employ a sample of the top 100 hi-tech global companies for a period of 2010-2017. Panel based regression and System Generalized Method of Moment (SGMM) techniques were used to address the issue of heterogeneity and endogeneity. The study findings assert that corporate ESG undertakings has a positively affect the innovation capacity of the global hi-tech firms. Thus, at a policy level, regulators shall design an ESG framework that is more conducive to the innovation endeavors of technology firms. Our results are robust to alternate econometric specifications