From ESG Performance to New Quality Productive Forces: The Role of Sustained Investor Attention

Abstract

ESG standards are becoming increasingly important for firms seeking to enhance productive capabilities while pursuing sustainable development. However, limited evidence exists on whether ESG performance is associated with firms’ new quality productive forces (NQPF) and on how investors’ sustained engagement with firm-specific information shapes this relationship. Using panel data on Chinese A-share listed firms from 2011 to 2024, this study examines the relationship between ESG performance and NQPF, with particular attention to the moderating role of sustained investor attention. The results show that ESG performance is positively associated with firms’ NQPF, and this finding remains robust after addressing potential endogeneity and conducting a series of robustness checks. More importantly, sustained investor attention strengthens the positive relationship between ESG performance and NQPF. This reinforcing effect is more pronounced among larger firms, firms located in more market-oriented regions, and firms facing greater financing constraints. Further analysis shows that corporate greenwashing is associated with lower sustained investor attention, consistent with the view that greenwashing undermines the credibility and informational value of ESG-related information and weakens investors’ incentives to maintain continued engagement with such information. These findings extend the literature on the economic consequences of ESG and highlight sustained investor attention as an important capital market condition shaping the relationship between ESG performance and firms’ productive transformation.