Work

Mechanism of Attracting Foreign Direct Investment from ESG Funds In The New Energy Vehicle Industry— Evidence from Chinese Corporations

Year: 2025

Type: article

Abstract: Enhancing the attractiveness of ESG funds and reducing financing constraints are important factors to help new energy vehicle corporations improve their research and development (R&D) capability and sustainable development. This research utilizes data from China’s listed from Shanghai and Shenzhen Stock Exchanges’ new energy vehicle corporations between 2010 and 2024 as a sample. It investigates the positive impact of foreign direct investment (FDI) from ESG funds on the improvement of R&D capabilities and sustainable development of new energy vehicle corporations, and tests the key role of reputation competition in attracting ESG funds for new energy vehicle corporations. The results show that FDI from ESG funds has a significant positive impact on new energy vehicle corporations’ ability to improve R&D and sustainable development, and improving ESG performance can play a positive role, and the higher the ESG score, the more attractive new energy vehicle corporations are to FDI from ESG funds. The specific mechanism analysis suggests that new energy vehicle corporations increase their attractiveness to FDI from ESG funds by reducing the volatility and increasing the industry differentiation of ESG performance. This study explores the mechanism of deep integration between FDI from ESG funds and new energy vehicle corporations from the perspective of reputation competition, providing empirical support for new energy vehicle corporations to reduce financing constraints by improving ESG performance, thereby helping new energy vehicle corporations to enhance R&D and sustainable development capability.

Source: SAGE Open

DOI: 10.1177/21582440251386207

Author: Man Jin

Institution: Chaohu University

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Affordable and clean energy, Climate action

Open Access status: gold

Estimated APC paid: $1,600