Can logistics enterprises improve their competitiveness through ESG in the context of digitalization? Evidence from China

Mingyue Fan (Jiangsu University School of Management, Zhenjiang, China)

Yue Tang (Jiangsu University School of Management, Zhenjiang, China)

Sikandar Ali Qalati (Liaocheng University, Liaocheng, China)

Blend Ibrahim (Istanbul Commerce University, Istanbul, Turkey)

The International Journal of Logistics Management

ISSN: 0957-4093

Article publication date: 1 October 2024

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Abstract

Purpose

This investigation endeavors to examine the routes by which environmental–social–governance (ESG) performance influences the competitive landscape for logistics enterprises, with a particular emphasis on the function of digitalization in this complex process. The research underscores the significance of the ESG context in the realm of digitalization, providing valuable insights into its impact on the overall competitiveness of logistics enterprises.

Design/methodology/approach

This research gathers information from a total of 90 logistics enterprises that are publicly traded on the Shanghai and Shenzhen A-share stock markets for analysis and model testing. Due to the multiple pathways of influence and the constrained size of the sample, it has been decided that the Piecewise structural–equation–modeling (SEM) approach will be employed.

Findings

The research reveals that ESG factors positively impact enterprises' competitiveness (EC). The augmentation of competitiveness is attributed to the moderating role of green technology innovation (GTI) and agency costs between ESG and EC. In the context of digitalization, the level of digitalization of logistics enterprises may create a capital squeeze effect on environmental performance, weakening competitiveness. Conversely, the level of digitalization positively regulates the promoting effect of governance performance on competitiveness.

Originality/value

This research provides a sound theoretical foundation for understanding how ESG contributes to boosting the competitiveness of Chinese logistics enterprises and extends the application of Piecewise SEM in the research field of logistics enterprise competitiveness. Furthermore, it offers a practical pathway for companies to implement ESG practices and foster competitiveness in digital environments.

Keywords

Citation

Fan, M., Tang, Y., Qalati, S.A. and Ibrahim, B. (2024), "Can logistics enterprises improve their competitiveness through ESG in the context of digitalization? Evidence from China", The International Journal of Logistics Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJLM-05-2023-0216

Publisher

:

Emerald Publishing Limited

Introduction

Threats to the competitive advantage of logistics enterprises are common. Optimal logistics management involves efficiently and cost-effectively transferring goods from suppliers to demanders (Jaaron and Backhouse, 2016). However, increasing logistics demands and transportation costs have reduced the competitiveness of many companies, pushing them to the brink of bankruptcy (Ding and Zhao, 2021). Additionally supply chain disruptions due to natural disasters, conflicts, pandemics and other factors have increased risks (Butt, 2021; Frederico et al., 2023). Consequently, researchers and practitioners are keen on devising strategies to sustain the competitive advantage of logistics companies.

As a responsible nation, China’s 14th Five-Year Plan has established the “dual carbon” approach, unequivocally promoting the comprehensive green transformation of crucial sectors, including the transportation industry, aiming to facilitate the sustainable and comprehensive advancement of both society and the economy. Given its fundamental role in the transportation industry, logistics demands particular attention in terms of energy consumption (Perotti and Colicchia, 2023). Ensuring the sustainable competitive edge of logistics companies necessitates placing significant emphasis on their sustainable development status.

Before the dual-carbon objective, environmental–social–governance (ESG) theory shaped the strategic growth of European companies. ESG is expected to play a larger role in the sustainable competitiveness of Chinese logistics companies. Recent academic research consistently demonstrated the relevance of ESG in enabling companies to achieve competitive advantages in the realm of sustainable development. For example, Friede et al. (2015) and HSBC (2020) advocate that fund companies and investors are progressively incorporating ESG as a critical component of their sustainable financing strategies, in addition to financial performance. Investors have the opportunity to mitigate investment risks and enhance investment returns by allocating their resources to enterprises that exhibit exceptional ESG performance (Management, 2021). Consequently, companies with exceptional ESG performance tend to enjoy heightened investor favoritism. Calabrese et al. (2021) highlight that listed companies strive to enhance their ESG efforts using widely acknowledged ESG measurement models to uphold a lasting corporate image in the market. Since the 1980s, enterprises have adjusted ESG-responsible investment decisions and behaviors according to their core advantages to enhance their competitive advantages (Rabaya and Saleh, 2022). Therefore, ESG will become a pivotal determinant for EC.

Regarding Chinese logistics companies' competitiveness, research on ESG practices is still in its early stages. Given the backdrop of sustainable development and the pressing challenges of meeting carbon reduction goals (Klymenko and Lillebrygfjeld Halse, 2022), further exploration is needed to elucidate the extent to which ESG practices contribute to the overall competitiveness of logistics companies. In the realm of green transformation, enterprises must prioritize ESG performance as a fundamental component of their business operations (Fan et al., 2023). Gao et al. (2021) have compellingly demonstrated that ESG efforts promote the sustainable development of companies. ESG encompasses three core components: environment, society and governance. Investments made by a company in these three dimensions yield both economic and non-economic benefits (Hove-Sibanda et al., 2017; Li et al., 2022a, b).

As ESG initiatives become more ingrained within enterprises, the importance of agency costs, financial values and green technology innovation (GTI) in shaping the competitiveness of enterprises across ESG dimensions has assumed growing significance. Professionals acknowledge that ESG factors further align ESG initiatives with the overall competitiveness of the enterprise (Benitez et al., 2020; Wu et al., 2022). Guo et al. (2020) posited that the advent of sustainable technology innovation facilitates the sustainable growth of businesses. The implementation of GTI by businesses yields a “win-win” scenario, concurrently augmenting the economic value of the enterprises and safeguarding the environment (Qalati et al., 2024). The combination of ESG values generated by green companies has been mentioned in many previous studies (Amel-Zadeh and Serafeim, 2018).

Hastori et al. (2015) and Li et al. (2022a, b) investigated the correlation between agency cost, enterprise governance and enterprise sustainability, arguing that reducing agency costs can improve corporate sustainability. Once agency cost, financial value and GTI effectively integrate into the ESG aspects, they significantly impact EC. Therefore, agency cost, financial value and GTI are key factors that ESG affects EC. The focus of this article lies in determining whether these three factors have a substantial influence within the three dimensions of ESG, enabling companies to effectively acquire diverse resources and maintain their competitiveness (Sum and Jessop, 2012).

Recently, digital technology has become more deeply integrated into the real economy, acting as a catalyst for the integration of global factor resources. Given this context, it is anticipated that the impact of ESG on EC will undergo significant changes. Digitalization involves the investment of capital and human resources, along with the application of digital technology, to streamline the transparency of operations and business processes in response to market changes (Kasych et al., 2019). The degree of digitalization is a pivotal factor in influencing the effectiveness of ESG strategy implementation (Ren et al., 2023). Furthermore, some scholars argue that digital technology has the potential to significantly enhance corporate competitiveness across multiple dimensions, bolster innovation potential and create new avenues for enterprise development (Xue et al., 2022). The implementation of digital technology reshapes an enterprise’s business strategy, encompassing production strategies, thereby enhancing production efficiency and bolstering corporate competitiveness (Dabbous et al., 2023). Consequently, the degree of digitalization in enterprises is a pivotal determinant that significantly influences ESG’s competitiveness within enterprises. As the level of digitization fluctuates, the ramifications of ESG implementation on a company’s competitiveness also assume substantial significance.

This research provides a significant contribution to the resource-based and ESG-related theories and practices. Previous research has primarily focused on ESG, with most studies exploring its implications in manufacturing companies without considering the context of sustainable development. Notably, there is little literature on the detailed examination of ESG components–environmental, society and governance–and their specific impact on corporate competitiveness. In the context of green development in carbon reduction, especially for logistics enterprises, their digital level becomes crucial for maintaining a competitive advantage. However, previous studies lacked a comprehensive consideration of the intricate interplay between agency cost, financial value, GTI, the digitalization level of companies and ESG. Identifying this research gap, further exploration into the comprehensive impact of ESG on the competitiveness of logistics companies in the digital era is necessary. To tackle this issue, the study is guided by the following research questions:

RQ.

What impact do ESG practices, alongside agency cost, financial value and GTI, have on the competitive advantage of Chinese logistics companies in the context of digitalization and sustainable development?

In particular, the study concentrates on the practices of ESG, alongside agency cost, financial value and GTI. Understanding their effect is essential for maintaining a competitive edge amid environmental sustainability pressure and the challenges of digital transformation. The study uses a piece structural equation modeling quantitative approach to analyze data from logistics enterprises listed on the Shanghai and Shenzhen A-share. This research is timely, given China’s ongoing commitment to reducing carbon emissions and the worldwide trend towards digitalization. Moreover, the study focuses on logistic companies in China, providing insights into a significant market undergoing rapid changes. The findings will benefit logistics enterprise managers, investors and policymakers by guiding strategic decisions in the era of digital and sustainable development.

The research findings carry significant implications for future research and practical implementation, providing valuable guidance for logistics enterprise managers. To enhance the capacity to address threats to sustainable competitiveness, a conceptual framework is devised, outlining the intricate interplay between ESG, agency cost, financial value, GTI and the extent of enterprise digitalization. The study employs the piecewise SEM quantitative research methodology, gathering data from logistics enterprises listed on the Shanghai and Shenzhen A-share in China.

The study is structured as follows: Section 2 reviews the literature; Section 3 introduces hypotheses; Section 4 outlines research variables, data collection and analysis method; Section 5 conducts empirical research and analysis; Section 6 discusses findings and Section 7 concludes the study.

Literature review and hypotheses development

Literature review

ESG for logistics

The ESG system has garnered significant attention, particularly with the promotion of the dual carbon target, and has officially entered the field of vision of Chinese investors. Amidst the COVID-19 pandemic, a robust ESG performance for enterprises in the financial sector is considered a valuable risk mitigation tool. Companies with strong ESG frameworks tend to experience fewer fluctuations in economic performance compared to those with weaker ESG scores (Zhou and Zhou, 2022).

Research by Zahid et al. (2022) emphasizes that businesses engaged in eco-friendly operations are more attractive to investors, often leading to superior performance in the stock market. Results from ESG investment strategies in other emerging markets have demonstrated their ability to generate significant excess returns. The long-term stability of a firm’s book and market value is significantly impacted by the ESG performance of enterprises (Yu et al., 2018). Moreover, enterprises disclosing their ESG ratings often experience elevated share prices and cultivate a more favorable reputation (Banke et al., 2022).

According to the International Energy Agency’s 2019 data, road transportation contributes to 25% of the overall CO₂ emissions, and this percentage is expected to rise (Bernauer et al., 2006). The International Transport Forum’s 2019 data predicts that freight demand will triple by 2050, making the implementation of eco-friendly logistics systems an essential action (Chiou et al., 2011; Rossi et al., 2013). Environmental initiatives in logistics can be delegated to packaging, transit and operations.

In packaging, efforts involve the utilization of reusable and recyclable materials (Coelho et al., 2020). Within the transit division, there is a focus on diminishing carbon emissions from vehicular transportation. E-commerce corporations are introducing energy-efficient vehicles and bicycles while optimizing transportation networks to minimize carbon emissions (Perboli and Rosano, 2019).

Additionally, environmental efforts are essential for logistics centers. E-commerce corporations are implementing green warehousing practices, utilizing sustainable energy, reducing energy consumption and maximizing space to cut expenses and enhance efficiency (Perboli and Rosano, 2019). Societal initiatives within logistics focus on cultivating employment prospects and improving both the operational and residential environments. Particularly, e-commerce corporations with logistics operations provide job opportunities for personnel. Societal initiatives of logistics distribution centers also contribute to generating employment opportunities and improving the operational environment (Kim et al., 2021). Effective governance is crucial for enhancing firm performance and securing the ongoing existence of businesses (Jensen, 1983). It involves the internal architecture of an organization and the relationships among various entities.

Choi (2022) suggests that small and medium-sized enterprises should consider ESG management as a growth engine for future opportunities, enabling them to better respond to changes in the international environment and ensure international competitiveness. Currently, there is a scarcity of research in China specifically focusing on logistics enterprises. Furthermore, there is a scarcity of research examining the impacts of the three dimensions of ESG on EC (Banke et al., 2022; Shalhoob and Hussainey, 2023). Additional literature is needed to supplement the existing knowledge on the topic (Choi (2022).

Digitalization for logistics

China’s 14th Five-Year Plan aims to accelerate digital development and promote the integration of technology into the economic, social and industrial sectors. This digital transformation generates value by improving operational efficiency, heightened consumer experience, refined business frameworks, competitive edge, strategic distinctiveness, improved cost-savings and stakeholder connections (Morakanyane et al., 2017). Digitalization equipped companies with numerous innovative methods to tackle challenges in supply chain management (Agrawal and Narain, 2018). Digital technology reduces information latency and operating costs while enhancing resources quantity and flexibility, thereby elevating service levels (Akbari et al., 2023).

Liu et al. (2021) posit that the ability to innovate digitally is a vital foundation for gaining a competitive edge for enterprises in the digital era. Digital innovation can enhance the multi-dimensional competitiveness of enterprises by improving supply chain integration, optimizing organizational structure, alleviating resource constraints, reducing costs, improving asset utilization efficiency, boosting innovation capabilities and advancing economic interests. Li et al. (2022a, b) demonstrate through a statistical analysis that Chinese industrial enterprises primarily focus on building digital capabilities in six aspects: R&D and innovation, production control, supply chain management, financial control, enterprise management and customer service. This is of great significance for enterprises seeking sustainable competitive advantage.

The advent of digital supply chains has significantly improved the transparency, speed, flexibility and profitability of information management (Agrawal and Narain, 2018). Cichosz et al. (2020) describe logistics digitization as the utilization of digital technology and capabilities by logistics personnel, partners and clients to enhance operational and ecological efficiency, customer experience, business models and other related areas. This results in the creation of multiple ecological, social and economic values for all stakeholders (Cichosz et al., 2020). Rasool et al. (2023), found that enhanced digitalization in reverse logistics increases competitiveness by making a company’s value chain more agile, innovative, responsive and cost-efficient.

Current research findings on digitalization in enterprises suggest a strong correlation between the extent of digitalization and the sustainability of business efficacy and competitiveness, and this holds true for logistics enterprises.

ESG for logistics in the digitalization context

The resource-based theory asserts that enterprises possessing high-quality resources are better positioned to meet consumer demand, secure a larger share of market competition and create greater economic value, thereby establishing a unique competitive advantage (Sum and Jessop, 2012). The long-term progress of enterprises and their position in the industry is significantly impacted by competitiveness. Logistics enterprises, being a foundational sector of the national economy, are particularly keen to explore corresponding solutions in the wave of competition (Liu et al., 2021).

Zhao et al. (2023) identified that the integration of digital processes in business operations and platforms can improve an organization’s ESG performance by facilitating eco-friendly innovation. Digitalization enhances ESG performance in various ways. Firstly, companies demonstrating excellence in environmental responsibility are proficient in identifying and addressing environmental issues. With the aid of digital and intelligent technologies, environmental problems can be quickly captured and appropriate green information technology services can be provided. This enables enterprises to discern and comprehend environmental responsibility issues clearly, and take active steps towards investing capital in environmental responsibility. Furthermore, corporate digital transformation strategies focus on constructing digital communities that operate on the principle of mutual benefit, promoting green integration and corporate social responsibility (Yang et al., 2020). Digitalization increases transparency in corporate governance and speeds up information, thereby reducing agency problems, and easing financial constraints (Hossnofsky and Junge, 2019).

In summary, ESG performance is a crucial driver for EC. The integration of new-generation digital technology with the real economy, driven by the digital economy, has a positive effect on EC. Despite the late adoption of ESG practices in China, there is insufficient related research (Gao et al., 2021; Tsang et al., 2023). Limited studies have delved into the connection between ESG factors and EC, highlighting the need for additional research in this area. Concurrently, existing research on the competitiveness of logistics enterprises emphasizes the importance of digital capabilities and the technological level of enterprises as significant competitive advantages for sustainable development. However, the role of enterprise digitalization in enhancing competitiveness is currently unclear and requires further exploration. Therefore, from the perspective of logistics enterprises, examines the impact of the ESG factors on EC based on the ESG system. It aims to clarify the role mechanism of enterprise digitalization, providing countermeasures and suggestions for logistics enterprises to strengthen their competitiveness.

Theoretical background

This paper aims to explore how logistics companies can enhance their competitiveness by implementing ESG practices in the context of carbon reduction and digitization. The central aim of the research is to elucidate the pathways through which management of agency cost, financial value, material value and GTI can impact logistics companies. The theoretical underpinnings of this investigation are drawn from sustainable development theory and resource-based theory. To connect variables logically with a particular theory and contribute to the theory, the authors followed the suggestions of prior work Bergh et al. (2022) and Whetten (1989).

The resource-based theory posits that companies with highly valuable resources have an increased capacity to meet consumer demand, gain a superior market share, generate substantial economic value and establish unique competitive advantages. It is imperative for companies to leverage their distinctive resources to distinguish themselves from their competitors. Only through the utilization of these unique capabilities can companies achieve competitiveness and implement value-creation strategies that are not easily imitated by their rivals (Barney, 1981). A company’s existing resources form the foundation upon which its innovative actions are built, safeguarding its competitive advantage. According to Karia (2020), the future sustainable competitiveness of logistics companies hinges on their acquisition of resource-based logistics, crucial for ensuring long-term business success. Logistics service providers that leverage resources can enhance their service capability and, consequently, their competitive advantage (Karia, 2020). In comparison to larger enterprises, financing poses a greater challenge for small enterprises (Lu et al., 2022). This, in turn, allows larger corporations to allocate greater funds toward ESG initiatives, enabling them to develop cutting-edge technologies and bolster their capacity to acquire diverse resources, thereby enhancing competitiveness (Guan et al., 2023).

Simultaneously, the landscape is being influenced by cutting-edge technologies like artificial intelligence (AI), big data, blockchain, cloud computing and 3D printing. Digital transformation is emerging as the pivotal catalyst for corporate development. Particularly in the perspective of the “dual carbon” objective, organizations are compelled to seamlessly integrate digital technology and green low-carbon transformation, with green serving as the foundation for corporate digitization (Agency, 2021). The concepts of society, economy and environment are cornerstones of the theory of sustainable development (Purvis et al., 2019). Resource sustainability implies a careful scrutiny of the overall impact of a process, considering its implications on the environment, natural resources and society (Becker and Ostrom, 1995). It is crucial to note that processes minimally impacting ecosystems and natural resources can be deemed sustainable, regardless of their long-term sustainability and economic growth. Resource sustainability requires careful consideration of the ESG aspects collectively referred to as ESG (Giannakis and Papadopoulos, 2016). The ESG score, also known as the sustainability score, has gained immense popularity in the financial sector and academia as an effective representation of an organization’s sustainability performance (Tamimi and Sebastianelli, 2017). Enterprises can enhance their competitiveness by focusing on implementing ESG.

Hypotheses development

Environmental, GTI and EC

The formulation of enterprise environmental strategy is grounded in the enterprise resource-based theory, which views the environmental performance of enterprises as a resource and an ability to shape competitiveness (Hart and Dowell, 2011). Diverse resources provide unique development abilities to the enterprise, ultimately resulting in exceptional performance (Barney, 1981). Prataviera et al. (2023) have established that enterprises adopting environmental strategies demonstrate a heightened ability to discern forthcoming ecological challenges and an augmented likelihood of mitigating their environmental impact while achieving exemplary financial performance. Forward-looking environmental strategies can effectively control environmental pollution, enhance performance and save the resources of enterprises. Voluntary environmental regulatory tools and the disclosure of environmental information also aim to improve the level and competitiveness of environmental governance.

Moreover, compared to stocks of non-green logistics companies, green logistics stocks exhibit less volatility and higher profits, even during periods of economic recession. Logistics companies labeled with green labels demonstrate a stronger ability to resist risks (Nilsson et al., 2017). Current research on the environmental governance of enterprises mainly supports the assumption that the adoption of environmental responsibility by organizations can enhance the market competitiveness of enterprises. Thus, the study assumes that:

H1a.

Environmental performance of logistics enterprises significantly influences EC.

GTI is a comprehensive concept encompassing all related innovations primarily aimed at reducing resource consumption and minimizing environmental harm (Bernauer et al., 2006). It also minimizes pollution and provides competitive advantages concerning performance (financial, social and operational) (Chiou et al., 2011), as extensively demonstrated in the manufacturing sector. However, environmental concerns in the logistics and transportation sector, despite being increasingly prominent, are often disregarded. To tackle the environmental pollution challenges in these sectors, numerous environmentally related green innovations may serve as pivotal solutions.

Baumgartner et al. (2008) found that the utilization of computerized routing and scheduling, as well as remote vehicle information processing, can significantly mitigate fuel consumption and emissions of carbon in road freight transportation. Similarly, the integration of electric vehicles into urban logistics exhibits substantial potential to abate pollution and alleviate last-mile delivery expenses (Roumboutsos et al., 2014). The Chinese government has promulgated numerous policies aimed at fostering energy and environmental conservation in domains such as green packaging, storage, transportation and standardized systems (Zhang et al., 2020). Li et al. (2022a, b) believe that the GTI of enterprises can achieve the minimum ecological negative effect, helping enterprises gain core competencies. We hypothesize that GTI can promote the competitiveness of logistics enterprises by influencing their environmental performance. Thus, we hypothesize the following:

H1b.

GTI significantly moderates the relationship between the environmental performance of logistics enterprises and EC.

Social, financial value and EC

The concept of corporate social responsibility (CSR) in business practices emerged in the 1950s (Campbell, 2007). According to Ibrahim (2017), economic responsibility holds the preeminent position in CSR, closely followed by ethical, legal and philanthropic responsibilities. As economic globalization advances, CSR has expanded to encompass the entire supply chain, exerting a substantial influence on the entire supply chain performance. Consequently, organizations at various nodes within the supply chain emphasize meeting social responsibility (Cheng and Ding, 2021).

Logistics plays a pivotal role within the supply chain and exerts a notable influence on both the entire socio-economic system and the supply chain (Chen et al., 2023). Previous research primarily concentrates on investigating how CSR influences the performance of corporations (Hossnofsky and Junge, 2019), corporate brand value (Cahan et al., 2016) and corporate profits (Hategan et al., 2018). As public concern for non-economic factors increases, CSR has become a hot topic of debate.

Examining the relationship between corporate competitiveness and CSR, Singh (2021) contends that CSR profoundly impacts a company’s reputation, customer loyalty and ability to attract high-caliber employees. This, in turn, bolsters market share, enhances operational efficiency and augments consumer satisfaction. Certain logistics corporations posit that embracing CSR practices can lead to enhanced public acclaim, heightened competitiveness and improved performance in the supply chain (Wu and Li, 2022).

Conversely, some scholars advocate the opposing viewpoint, asserting that CSR is an encumbrance. They argue that it not only lacks advantages for organizations but also compels them to divert investments initially intended for operations and production This diversion diminishes the production efficiency of organizations and consequently impacts the entire supply chain performance (Jun et al., 2022). Consequently, exploring the impact of CSR on EC merits investigation.

Drawing from prior research, this article posits that implementing CSR can have a favorable effect on the supply chain risk of logistics enterprises and effectively augment their reputation (Singh, 2021). Moreover, with the escalating awareness of social responsibility among supply chain members, the overall profits of various enterprises have also increased, further enhancing competitiveness (Wu and Li, 2022). Thus, the study assumes that:

H2a.

The social responsibility of logistics enterprises significantly influences EC.

Superior financial performance can stimulate CSR activities. Some studies have indicated that financial value is the primary catalyst for CSR (Ibrahim, 2017). Conversely, other studies indicate that companies facing financial challenges are more likely to seek legitimacy and resources through social responsibility activities (Campbell, 2007).

The “Available Resources Hypothesis” posits that CSR practices may impose cost burdens on enterprises (Friedman, 1970). Robust financial performance ensures that ample resources can be allocated to CSR practices (Wu and Li, 2022). Moreover, the state-owned enterprises (SOEs) social responsibility performance provides better access to equity financing through the stock market (Zahid et al., 2022).

However, over-investing funds in activities like environmental protection and social responsibility to build a good reputation, while enhancing enterprise ESG performance, increases enterprise costs and crowds out resources available for investment (Jun et al., 2022). This results in less efficient investment. Capital strength is an important factor for social responsibility, and the ability to generate profits, operate and service debts directly and positively affects the growth of an enterprise (Khan et al., 2019). Jadhav et al. (2022) found that in logistics enterprises, higher levels of sustainable development and social responsibility fulfillment are related to the enhancement of firm financial performance. Therefore, we believe that the strong financial performance and value of logistics enterprises can serve as a financial assurance, instilling confidence in their ability to champion social responsibility initiatives. This, in turn, promotes sustainable development and enhances their competitiveness. Thus, we hypothesize the following:

H2b.

Financial value positively regulates the relationship between social responsibility performance and EC.

Governance, agency costs and EC

Corporate governance is perceived as an efficient mechanism for delineating the rights and obligations of diverse stakeholder groups within a corporation (Ho and Wong, 2001). Efficient corporate governance can manifest a signal of superior corporate management to society (Michelon and Parbonetti, 2010). Agency theory anticipates that utilizing governance mechanisms to safeguard investors and mitigate agency conflicts plays a pivotal role in establishing robust relationships among companies and their stakeholders to preserve and enhance the legitimacy of the corporation (Jensen and Meckling, 1976).

Since 2006, China has continued to increase its efforts to reform the enterprise governance of SOEs. Today, the governance of SOEs has steadily improved, leading to an overall increase in the market competitiveness of enterprises. The influence of enterprise governance on businesses' sustainable growth remains a core issue in the financial sector. The Modigliani–Miller theory was one of the first to suggest that enterprise governance can impact the firm’s sustainable growth (Lane, 2009). A study by Hove-Sibanda et al. (2017) demonstrated that the adoption of enterprise governance by small businesses had a substantial and positive effect on their competitiveness and overall performance. Gundogdu et al. (2023) also found that logistics companies adopting open management provide clearer and more transparent information to the public, strengthening decision-making processes and increasing credibility among stakeholders. The improvement in the governance level of logistics enterprises can simultaneously enhance their competitive advantages. Thus, the study assumes that:

H3a.

Enterprise governance significantly influences EC.

The concept of agency cost was first proposed by Jensen and Meckling (1976). These expenses emerge from conflicts of interest among management staff and business owners. The management model of modern joint-stock enterprises typically involves a separation of the two powers of control and management, leading to a significant principal-agent problem in the enterprise development process (Yuan et al., 2021). Agency cost is an internal expense that hinders the company’s sustainable growth and is detrimental to long-term growth. From a governance perspective, Hastori et al. (2015) found a negative correlation between agency costs and the firm’s sustainable growth. Many scholars have discovered an inverse relationship between agency costs with enterprise governance measures such as board independence and equity concentration (Coles et al., 2008). Consequently, we can assert that as agency costs within the corporation decrease, the effectiveness of relevant corporate governance will be enhanced, thereby boosting the competitiveness of the enterprise. Currently, research in this area has not focused on logistics corporations. Given that logistics corporations are in urgent need of addressing sustainable development issues, it is crucial to investigate the agency costs, corporate governance and competitiveness correlations. Thus, we hypothesize the following:

H3b.

Agency costs negatively moderate the relationship between enterprise governance performance and EC.

The moderating role of digitalization

In the rapidly changing contemporary technology market, the development and adoption of digital technology, along with strategic thinking, can significantly improve the competitiveness of commercial companies (Xue et al., 2022). Advancements in Industry 4.0, including the internet of Things, artificial intelligence and big data analytics, hold the potential to enhance sustainability by minimizing wastage and optimizing efficiency (Dabbous et al., 2023). The Internet also promotes environmental management measures for enterprises by improving the intelligence and accuracy of environmental regulation, government and services.

Various digital technologies are employed in the environmental governance of logistics enterprises, covering activities like loading, unloading, sorting, packaging, transportation and logistics information technology. This includes the use of electronic face sheets for collection and smart maps for transportation, effectively reducing waste in logistics activities and lowering carbon emissions. With digital participants gaining access to more comprehensive technological innovation resources, the linked development of various production factors promotes open innovation in enterprises. This, in turn, facilitates the reintegration of green technology resources, creating a virtuous circle that efficiently reduces energy resource consumption and pollution (Jiang et al., 2023). Therefore, it is predicted that the incorporation of digital technology enables logistics enterprises to carry out environmental governance activities more smoothly and efficiently. In short, the level of digitalization in logistics enterprises plays a crucial role in reconciling the influence of environmental governance on EC.

The development of digital technology drives the improvement in the digital level in enterprises, enabling them to better fulfill their social responsibilities. The increase in digitalization enhances enterprise social transparency, addressing the information gap and raising stakeholders’ expectations for CSR performance (Gundogdu et al., 2023). According to signaling theory, a positive image conveyed by an enterprise can garner favor from consumers and institutional investors, resulting in increased consumer support and capital investment. For instance, companies can leverage emerging technologies such as AI and machine learning to produce eco-friendly products (Lobschat et al., 2021).

Simultaneously, with the widespread adoption of information technology, enterprise stakeholders have more diversified ways to access enterprise information. The disclosure of social responsibility performance information by enterprises can send signals to investors through various channels, indicating the soundness of their business (Benitez et al., 2020). This efficient communication can attract capital injection more efficiently. Therefore, it is reasonable to believe that the digitalization level of logistics enterprises can reconcile the relationship between CSR and competitiveness.

The information asymmetry problems arising from enterprise governance can be mitigated to some extent through the use of digital tools and instruments. The correlation between digitalization and mechanisms for enterprise governance is found to be mutually supportive (Ren et al., 2023), as science and technology are more efficiently integrated into enterprise governance in a digital context. Previous research has argued that digitalization enables enterprises to generate significant economic more efficiently, benefiting from improved economies-of-scale, learning and scope. This results in enhanced returns on capital and heightened competitive concentration (Sama et al., 2022).

In the present era of digitalization, information systems such as ERP, WMS and TMS contribute to data standardization and transparency. Digital technologies are instrumental in establishing an efficient governance architecture to clarify business responsibilities, roles and processes (Tsang et al., 2023). Ren et al. (2023) argue that using digital technologies in the workplace can enhance the accessibility, availability and openness of real-time information, thereby reducing the irrationality of managerial decision-making. Therefore, it is reasonable to believe that enterprise digitization plays a moderating role between corporate governance and competitiveness. Thus, we assume that:

H4a:

Digitalization positively moderates the relationship between the logistics enterprise environment and EC, and when the level of digitalization is higher, the stronger the role of the environment on EC.

H4b.

Digitalization positively regulates the relationship between the logistics enterprise environment and EC, the higher the level of digitalization, the stronger the role of social responsibility in EC.

H4c.

Digitalization positively moderates the relationship between enterprise governance and EC in logistics enterprises, with the stronger role of enterprise governance on EC when the level of digitalization is higher.

The theoretical framework of this paper is shown in Figure 1.

Methodology

Variable selection

Dependent variable

Enterprise competitiveness (EC) is a crucial aspect of overall firm performance. Chinese researchers assert that the asset contribution rate, reflecting the profitability of organization assets, stands as a key indicator of operational ability and profitability. This metric essentially unveils the strength level of enterprises (Li et al., 2019). The definition of EC tends to vary across industries. This paper adopts the methodology proposed by Sum and Jessop (2012), employing the logarithm of the total business revenue of logistics enterprises, with the addition of one. This measure effectively gauges the competitiveness of logistics enterprises, where a higher value indicates a more competitive standing for the logistics organization.

Independent variables

Environmental performance: Expenditure on environmental protection pertains to the costs incurred in controlling pollution arising from the operational and production practices of organizations (Zhang et al., 2022). Tang et al. (2022) present a measure for indicating the extent of environmental protection expenditure by introducing a ratio of total environmental preservation investment to the capital stock of enterprises. In this study, we follow Tang et al. (2022) approach, utilizing the logarithm of enterprise environmental capital expenditure plus one as an indicator of enterprise environmental performance. Environmental protection expenditure encompasses items such as the enterprise’s management fee, sewage discharge fee, sustainable fee and investment in projects aimed at conserving energy and protecting the environment within construction projects.

Social responsibility: Given that Hexun.com’s social responsibility rating encompasses a broader range of enterprises with more comprehensive data, and considers the level of enterprise social responsibility performance from stakeholders’ perspective, this paper employs Hexun.com’s annual composite score as a measure of social responsibility performance.

Enterprise governance: The research utilizes the proportion of independent directors as a measure of enterprise governance.

Moderating variables

GTI: Previous studies predominantly employ the count of sustainable patent applications to measure GTI. However, recognizing the practical nature of green innovation, this paper opts for the count of green utility model patents obtained as a more reflective measure of GTI.

Financial value: Literature offers two primary methods for measuring the financial value of enterprises: market-based approaches like Tobin Q and accounting-based profitability metrics, such as return on equity (ROE), or return on total assets. Given the prevalent use of profitability metrics in academia, this study with this convention. It selects the logarithm of ROE as a metric for financial value, providing insights into net asset utilization efficiency to evaluate the enterprise’s financial standing and operational effectiveness (Tang et al., 2022).

Agency cost: The management of agency cost is adopted as a measure of the agency cost, levering the management expense ratio. This ratio precisely gauges costs incurred by managers due to excessive in-service consumption, offering a more accurate reflection of management agency cost.

Digitalization of enterprises: Annual reports of listed logistics enterprises provide an objective insight into the technical landscape of these enterprises. This study employs the frequency of digital-related keywords in the annual reports as an indicator of enterprises' digital level. Table 1 outlines the details of the variables.

Data collection

This study delves into logistics enterprises, utilizing data from listed logistics entities on the Shanghai and Shenzhen A-shares in China. The data spans from 2012 to 2021, ensuring a comprehensive and detailed dataset. To ensure accuracy and comprehensiveness, environmental, enterprise governance, financial value and agency cost data are sourced from the China Stock Market & Accounting Research (CSMAR) database. Renowned for its precision authority, and bilingual interface, the CSMAR database stands out as the largest economics and financial research database in China.

For insights into enterprise social responsibility, Hexun.com is tapped as a data source, while China Intellectual Property Network provides data on GTI. The digital-level data of enterprises is extracted from their annual report using Python crawlers.

Sample data were meticulously selected based on specific criteria: (1) exclusion of enterprises marked by ST, *ST, PT and those delisted during the sample period; (2) exclusion of enterprises listed for less than three years or with a continuous period of less than three years; (3) all data underwent a 95% tailing process. The final dataset comprised 90 eligible enterprises.

Data analysis

Traditional structural equation modeling (SEM) operates under the assumption of variable independence, utilizing variance-covariance for holistic model estimation. However, when faced with non-normally distributed variables and complex correlations, this approach falls short. In 2016, Lefcheck introduced Piecewise SEM, a paradigm shift that abandons holistic estimation in favor of local assessment for each variable path. This modification acknowledges the nested structure of variables within each path, yielding more precise outcomes. Notably, Piecewise SEM accommodates studies with limited sample sizes (Lin et al., 2017), having demonstrated success in ecology but remaining less acknowledged in business management.

Given the nuanced, mixed-effects impact of ESG performance on logistics EC explored in this paper, the Piecewise SEM method is employed. Compiling pertinent data on ESG variables, we categorize the impact of ESG on EC into three impact pathways: environment, society and governance. Utilizing Piecewise SEM (Hastori et al., 2015), we dissect the direct impact of each pathway, subsequently integrating modulating variables to evaluate their influence.

Empirical results

Descriptive statistical analysis

Table 2 illustrates that the average EC is 22.02, with a median of 22, suggesting a narrow range of competitiveness among the sample enterprises. Minor differences exist between mean and median values for environment and governance. However, the average social is 27.17, with a wide range from a maximum of 73.99 to a minimum of −2.18, highlighting substantial variations in social performance among the sample enterprises.

The average GTI is 1.23, ranging from a maximum of 23 to a minimum of 0, suggesting substantial differences in GTI. The median value of 0 implies that most enterprises have yet to embrace GTI. The average ROE is 8.78, with a considerable polarization in financial value, ranging from a maximum of 39.4 to a minimum of −18.9.

The average management of agency cost is 0.08, while the average digitalization is 4.84, ranging from a maximum of 37 to a minimum of 0, with a median value of 2. The digitalization level varies significantly among the sampled enterprises, with most of the majority still lagging in terms of digitalization.

Piecewise SEM analysis

Direct effect analysis

Utilizing Piecewise SEM, this study conducts a direct-effects analysis of ESG factors on EC. Figure 2 and Table 3 present the results, indicating that both environmental and governance factors exhibit a significantly positive effect on competitive advantage, while the impact of social factors appears slightly weaker.

Figure 2 illustrates the outcomes of the direct effect of ESG on EC. Concurrently, Table 3 reveals that the effect of the ESG dimensions on EC is significantly positive (p < 0.01). Notably, the environmental dimension of ESG demonstrates a stronger contribution to the EC compared to the governance dimension. Yet, the impact of social dimension on EC remains inconclusive. These findings substantiate H1a and H3a while rejecting H2a suggesting that increased investment in the environmental and governance underpinnings of ESG for logistics enterprises can enhance their competitiveness.

Moderating effects analysis

(i)
Moderating effect of GTI, financial value and agency costs

The results presented in Figure 3 and Table 4 were obtained by incorporating GTI capability, financial value and agency cost in the model. The regression coefficients of environment and enterprise governance on EC are positive and statistically significant (p < 0.01), indicating that the environment and enterprise governance can promote the improvement of EC. These results provide further confirmation of H1a and H3a.

Moreover, the regression coefficient of the interaction term between the environment and GTI on EC is significantly positive (p < 0.01). This indicates that a higher level of GTI can enhance the positive effect of environmental performance on the improvement of EC. Additionally. the interaction term between enterprise governance and agency cost on EC is significantly negative (p < 0.01). This indicates that the correlation between enterprise governance and EC is negatively moderated by the agency cost of enterprises. In other words, the higher the agency cost, the less effective enterprise governance becomes in enhancing EC, supporting H3b. However, the impacts of social responsibility on EC and the interaction between social responsibility and financial value on EC were not significant. This indicates that the impact of fulfilling social responsibility on EC remains unclear. Therefore, H2a and H2b could not be confirmed.

(ii)
Moderating effect of digitalization

The above tests failed to verify the social responsibility influence on EC. As a result, the moderation influence of social responsibility was removed from this section, and the moderating effect of the level of digitalization of enterprises was investigated. This led to the development of the path diagram shown in Figure 4.

As seen in Table 5, environmental performance has a significantly positive impact on EC. However, the influence of enterprise governance performance on EC has not been established. There is a significant positive association in the interaction between GTI and the environment. In other words, as GTI output increases, the environmental performance significantly contributes to the improvement of EC. On the other hand, the interaction between environmental performance and digitalization exhibits a significant negative correlation with EC. This may be attributed to the crowding-out effect of the funds allocated to digitalization on those intended for GTI. Over-investment in digital technology research and development by enterprises could lead to a decline in EC.

The role of agency costs in moderating the impact of enterprise governance on EC remains negative. Consequently, the effect of enterprise governance on EC becomes insignificant. However, the interaction term between enterprise governance and enterprise digitalization demonstrates a positive and significant effect on EC. Drawing from the interpretation of the significant interaction term and insignificant main effect in the book “Behavioural Science Research Methods”, this paper concludes that there is still a positive effect of enterprise governance on EC. Additionally, there is a recommendation that digitalization positively moderate this situation.

Robustness analysis

This paper conducted several robustness tests, including: (1) replacing the measure of EC with the natural logarithm of total assets; (2) using hexun.com’s enterprise environmental responsibility score as a measure of logistics enterprises' environmental performance and (3) replacing the measure of enterprise governance with the percentage of shares owned by the largest shareholder.

Upon substituting the measurement of the main variables, the outcomes of the path assessments are depicted in Figure 5 and Table 6. The impact of the environmental dimension in the ESG of logistics enterprises on EC becomes insignificant, and the impact of the interaction term between the digitalization of enterprises and the environment on EC also becomes insignificant. However, the rest of the results remain largely unchanged.

Heterogeneity analysis

In the context of China’s institutional framework, the ownership of listed enterprises emerges as a crucial factor influencing ESG performance. Therefore, this paper categorizes SOEs and non-SEOs for examination.

Figures 6 and 7 illustrate the direct effect of ESG factors on EC within SOEs and non-SEOs sectors. Simultaneously, Tables 7 and 8 provide data-driven insights into the influence of ESG on the competitiveness of these enterprise types. The results from the direct effect test show that, in SOEs, the environmental dimension’s effect on EC within the ESG is significantly positive (p < 0.01). However, the effect of social responsibility and enterprise governance dimensions on EC fails to exhibit significance. In the non-SOEs, the environmental dimension exerts a negative impact on EC, with a p-value of 0.0948. The social and governance dimensions demonstrate some impact on EC, yet the p-values are 0.4806 and 0.3786, respectively. Overall, the impact of ESG dimensions on EC does not exhibit statistical significance.

The comprehensive test findings are depicted in Tables 9 and 10. The outcomes indicate that, for SOEs in the logistics industry, fulfilling environmental and governance responsibilities enhances EC. However, only the impact of environmental factors on EC is significantly positive (p < 0.01). In contrast, for non-SOEs, environmental and enterprise governance do not exhibit an effect on EC. Specific pathway impacts are depicted in Figures 8 and 9.

Overall, the ESG performance of SOEs has a more significant impact on their competitiveness, and the role of moderating variables remains consistent. In non-SOEs, the moderation impact of GTI between the environment and EC contrasts with that of SOEs. Moreover, the negative moderating effect of digitalization between the environment and EC is more robust.

SOEs align their interests with the state, prioritizing social objectives and contributions to society over economic interest, unlike non-SOEs that focus on economic goals. Additionally, SOEs grapple with more complex principal-agent relationships, leading to higher marginal benefits from improved ESG performance and reduced adjustment costs. Consequently, the impact of ESG performance is more substantial for SOEs. According to signaling theory, improved ESG performance signals from SOEs are more likely to be received and recognized by investors than those from non-SOEs. This recognition enables SOEs to better mitigate the various challenges, resulting in a more pronounced impact on ESG performance.

Discussion

This study employs resource-based and sustainable development theory as the foundational framework to examine the link between ESG factors and EC. Additionally, key variables such as GTI, financial value, agency cost and digitalization are incorporated to explore the mechanisms through which ESG impacts EC.

Firstly, our findings underscore the significant positive impact of environmental performance on EC. Enterprises within the logistics sector that engage in proactive environmental strategies are seen to gain a competitive edge. This is consistent with the observations made by Zahid et al. (2022), who highlight the increasing stakeholder preference for companies with robust ESG credentials. Furthermore, the integration of sustainable practices such as reverse logistics for recycling, as studied by Dissanayake and Pal (2023), reinforces the application of the resource-based theory in enhancing business growth and competitive advantage. This practical application of sustainability management within supply chains effectively bridges the gap between theoretical insights and practical implementation, as noted by Hart and Dowell (2011).

Secondly, the influence of social responsibility on EC appears to be more nuanced. The study indicates that current investments in social initiatives have not yielded significant competitive returns, possibly due to the high capital allocation required. This observation aligns with Shalhoob and Hussainey (2023), who suggest that the financial burden of these practices may initially outweigh their profitability. The balancing of cost inputs against outputs remains critical, and it seems that a threshold has yet to be reached where social responsibility markedly enhances competitiveness.

Thirdly, governance performance is found to have a robust positive effect on EC. This aligns with Handoko et al. (2019), who emphasize that resolving principal-agent issues within corporate governance can reduce transaction costs, minimize agency conflicts and deter opportunistic behaviors by managers, thereby enhancing EC. Effective governance therefore serves as a cornerstone for sustainable competitive advantage.

In terms of moderating influence, GTI and the agency costs of logistics enterprises play an essential role. Green innovation capability positively impacts financial performance through environmental performance (Jo and Kwon, 2022), consequently enhancing EC. GTI has a significant moderator effect, making a firm’s environmental performance more competitive. In terms of governance, Hastori et al. (2015) observe a negative correlation between agency costs and the sustainable growth of enterprises. As the problem of agency costs is mitigated, governance quality is enhanced, thereby boosting EC.

Lastly, the digitization of logistic enterprises can enhance their environmental and governance performance, subsequently increasing their competitiveness. In short, digitalization plays a vital role in implementing regulations. The digitalization of enterprises enables greater flexibility and competitiveness, facilitating company growth (Sama et al., 2022). In challenging business environments, the prompt adoption of digital technology can aid companies achieve competitive benefits, essential for their survival (Xue et al., 2022). Wang and Esperanca (2023) advocate for prioritizing the adoption of digital solutions for sustainable business practices. For instance, small and medium-sized enterprises might contemplate investment in energy management systems to lower energy consumption and mitigate greenhouse gas emissions. Alternatively, they could opt to adopt supply chain management software to guarantee responsible procurement practices and fair labor standards. Digital technology facilitates real-time information exchange among companies and partners, enhancing communication efficiency (Wei et al., 2023). This enables enterprises to lower management expenses by adopting or procuring digital technology services (Wang and Esperanca, 2023). These findings align with the conclusions presented in this article.

Theoretical implications

Resource-based theory emphasizes the strategic role of unique resources in achieving competitive advantage. Our findings reveal that ESG (Environmental, Social and Governance) factors are indeed such strategic resources, bolstering the competitive stance of logistics firms (Dissanayake and Pal, 2023). Specifically, this study demonstrates that environmental performance and sound corporate governance significantly elevate the competitiveness of these firms. By investing in green initiatives and enhancing governance transparency, logistics firms not only align with market demands but also gain distinct competitive advantages (Lin et al., 2021).

Additionally, the moderating effects observed—green technological innovation in environmental performance and agency costs in corporate governance—extend the applicability of resource-based theory. Green technological innovations serve as distinctive technical resources, enhancing firms' competitiveness by promoting energy efficiency and environmental stewardship (Jo and Kwon, 2022). Meanwhile, reduced agency costs through improved transparency optimize information flow and equity distribution, strengthening corporate governance (Chen et al., 2019). The synergy between these factors and China’s sustainability goals suggests that logistics firms that proactively engage in environmental preservation and adhere to stringent governance practices are likely to benefit from policy incentives, further enhancing their competitive position (An et al., 2021).

The role of digitalization also underscores a significant theoretical evolution, marrying the principles of resource-based and sustainable development theories. Digital technologies in logistics not only refine operational efficiency but also contribute to sustainability by reducing energy consumption and emissions, thereby reinforcing the competitive edge of firms in this sector (Rehman Khan et al., 2022).

Practical implications

The application of ESG principles substantially affects their competitiveness and offers constructive solutions for Chinese logistics enterprises. To enhance logistics enterprises' ESG performance and retain their competitive edge, corresponding strategies and recommendations are proposed from three perspectives: business managers, investors and policymakers.

It is advised that managers of state-owned and private logistics firms embed ESG goals within their strategic frameworks. Priorities should include adopting sustainable practices like green packaging, investing in new energy solutions and fostering innovations in green technology. Additionally, enhancing corporate governance through mechanisms such as equity incentives and collaborations with institutional investors is crucial. The role of digital transformation—leveraging technologies for real-time tracking and efficient route planning—should also be emphasized to optimize operational and environmental performance.

Investors should champion the ESG investment philosophy by promoting responsible investment practices, supporting ESG-focused financial instruments and emphasizing the importance of ESG evaluations in investment decisions. Such actions will not only foster a community of responsible investors but also enhance the financial and competitive robustness of logistics enterprises committed to ESG principles. Policymakers need to develop robust frameworks for ESG adoption, including stringent regulations for ESG disclosure and auditing. Incentives such as tax breaks and policy support should be provided to firms that meet ESG benchmarks. Moreover, efforts should be made to enhance understanding and implementation of ESG standards through training and promotional activities, fostering a culture of sustainability within the logistics sector.

Limitations and future research

This study, while insightful, has limitations that open avenues for further research. The sample is confined to listed Chinese logistics firms, suggesting potential bias and limiting generalizability. Future studies could include a broader array of firms, including non-listed entities, to provide a more comprehensive analysis. Additionally, considering the regional specificity of the data, subsequent research might explore the impact of ESG on logistics firms in other regions to discern global trends.

Moreover, the research methodology employed, piecewise SEM, could be expanded upon with larger sample sizes and alternative analytical techniques like full SEM or regression analysis to deepen the understanding of ESG’s impact on competitiveness.

Conclusion

Enhancing the competitiveness of logistics enterprises and promoting their high-quality sustainable development aligns with the goals of China’s economic society and ecological civilization. This paper aims to investigate how each dimension of ESG performance in listed logistics enterprises in China influences GTI, enterprise financial value and agency costs. The objective is to stimulate the intrinsic motivation within enterprises to conscientiously fulfill their ESG responsibilities, thereby enhancing competitiveness. The empirical analysis is based on data from logistics companies listed on the Shanghai and Shenzhen A-shares in China.

The study reveals the following key findings:

Firstly, the environmental and enterprise governance dimensions of ESG in logistics enterprises significantly contribute to their competitiveness. However, the impact of the social responsibility dimension on EC cannot be verified.

Secondly, ESG performance enhances EC through different channels. GTI positively moderates the impact of the environmental dimension of ESG on EC, while agency cost negatively moderates this impact. Additionally, agency costs negatively moderate the effect of the ESG enterprise governance dimension on EC. The level of digitalization suppresses the facilitating effect of environmental performance on EC but positively promotes the facilitating effect of enterprise governance performance. These results remain largely unchanged after robustness testing.

Thirdly, analyzing the heterogeneity of enterprise property rights indicates a more pronounced positive relationship between ESG performance and SOE competitiveness. This is because the ESG performance of SOEs is often linked to policies and has a certain degree of compulsion, making it more likely to promote the improvement in EC.

Figures

Figure 1

Hypothetical framework

Figure 2

Direct effect test

Figure 3

Test for moderating effect

Figure 4

Test for moderating effects

Figure 5

Robustness tests

Figure 6

Direct effects test for SOEs

Figure 7

Testing the direct effects of non-SOEs

Figure 8

Testing the moderating effect of SOEs

Figure 9

Testing the moderating effect of non-SOEs