Sustainable competitiveness through ESG performance: An empirical study on corporate resilience

The COVID-19 pandemic significantly impacted businesses and economies worldwide, highlighting the importance of resilience in the face of unexpected disruptions. In this context, environmental, social, and governance (ESG) practices have emerged as pivotal strategies for companies to maintain sustainable competitiveness. Organizations with superior ESG performance tend to exhibit enhanced sustainability and financial performance, presenting substantial opportunities for investors. Unlike previous research that predominantly concentrates on financial outcomes, this study delves into the organizational implications of ESG, bridging the knowledge gap regarding its role in resilience. This study investigates the relationship between ESG performance and corporate resilience utilizing data from Chinese-listed companies from 2010 to 2022. Corporate resilience is measured through two dimensions using the entropy weight method. The study finds a positive and statistically significant relationship between corporate resilience and ESG performance, thereby providing new evidence of the influence of ESG performance on corporate resilience. Furthermore, this impact is achieved through reduced financing costs, improved information disclosure quality, and diminished liquidity. Notably, these findings exhibit greater prominence in larger enterprises, while state-owned enterprises demonstrate no discernible effects. This research provides novel insights into the manner in which ESG practices can augment corporate resilience, thereby contributing to sustainable competitiveness in dynamic environments.