The Impact of Corporate Science on ESG Performance: A New Approach

Abstract

Despite the considerable costs and risks associated with corporate science, an increasing number of Chinese listed firms are disclosing their research in peer-reviewed journals. This study pioneers an investigation into the effect of corporate science on environmental, social, and governance (ESG). Leveraging novel hand-collected publication records from Chinese- and English-language journals (2007–2021), we provide the first large-scale evidence linking corporate science to ESG outcomes. Our findings reveal that both the quantity and quality of corporate science are positively associated with superior ESG performance, with English-language publications exhibiting a stronger effect than their Chinese-language counterparts. Mechanism analysis identifies four pathways through which corporate science promotes ESG performance: enhancing green innovation, improving corporate reputation, strengthening human capital, and fostering a culture of integrity. Furthermore, we show that the strength of a firm's patent portfolio amplifies these positive effects. Overall, our results underscore the strategic value of corporate science in advancing firms' sustainable development goals.