The Effect and Mechanism of ESG Performance on Corporate Value Creation: Evidence From Manufacturing Companies in China

Against the backdrop of China’s “carbon peaking” and “carbon neutrality” goals, manufacturing enterprises face growing environmental compliance pressures while assuming a critical role in achieving sustainable development. Using quarterly panel data of Chinese A-share listed manufacturing firms from 2009Q1 to 2022Q1, this study employs a two-way fixed effects model with multiple robustness checks to examine the impact and mechanisms of environmental, social, and governance (ESG) performance on firm value creation. The results show that superior ESG performance significantly enhances firm value, with its effect moderated by ownership type and firm size. Mechanism testing provides partial support for the “operational efficiency enhancement–financing cost reduction” channel. Moreover, firm growth potential significantly strengthens the ESG–value relationship, particularly among value-creating firms. Sub-dimensional analysis reveals heterogeneity across ESG components: the social dimension serves as the key driver of value creation, while the environmental dimension positively contributes to operational efficiency and financing cost reduction. These findings offer important implications for manufacturing firms in designing differentiated ESG strategies and for policymakers in developing institutional and incentive mechanisms to foster sustainable industrial transformation under China’s dual-carbon strategy.