Green entrepreneurship orientation and environmental, social, and governance performance: Do contractual strategic alliances matter?

The driving forces that enable firms to achieve better environmental, social, and governance (ESG) performance have been a popular topic in academia. However, in the context of increasing numbers of entrepreneurial teams engaging in green entrepreneurship, whether a green entrepreneurial orientation (GEO) enhances ESG performance from an overall strategic orientation is still unclear. If so, what are the mechanisms by which a GEO influences ESG performance? To determine the potential relationship and influencing mechanism between a GEO and ESG performance, we use Chinese listed firms from 2009 to 2022 as our research sample and fixed effects and difference-in-difference models to explore how a GEO affects ESG performance. The results show that a GEO significantly and positively affects ESG performance, especially for nonstate-owned enterprises (nonSOEs), firms with high digital transformation, and firms in the manufacturing industry. Further research shows that participation in contractual strategic alliances (SAs) can strengthen the effect of a GEO on ESG performance. Moreover, we find that a GEO can efficiently encourage firms to engage in contractual SAs, that the link between the two is moderated by financial constraints (FCs) in an inverse-U manner, and that this relationship is evident only for nonSOEs. In conclusion, our study provides a nuanced understanding of how a GEO, contractual SAs, and FCs collectively shape corporate ESG activities and elucidates their far-reaching implications for enhancing ESG performance. Our empirical findings also have practical implications for firms seeking to improve their ESG performance.