The Impact of ESG Internal Development Balance on Corporate Financing Constraints

Abstract

Under the dual carbon goals and the context of high-quality development, ESG performance has become an important measure for assessing corporate risk and value. However, the unbalanced development model of some companies that 'focus on the environment but neglect governance' can easily trigger accusations of 'greenwashing' and conceal potential financial risks. Based on this, this paper uses Chinese A-share listed companies from 2010 to 2024 as a sample and innovatively constructs an 'ESG Internal Development Balance' indicator to deeply examine its impact on corporate financing constraints and the transmission mechanism. The study finds: First, the ESG internal development balance can significantly alleviate corporate financing constraints. Coordinated ESG practices can convey highly reliable sustainability signals to the market, effectively reducing the information screening costs for financial institutions. Second, external audit certification and enhanced debt acquisition capability serve as dual transmission paths. Balanced ESG development not only encourages companies to engage high-quality audits to reduce information asymmetry but also aligns with green credit preferences, thereby significantly improving borrowing capacity and substantively enhancing liquidity. Third, heterogeneity analysis shows that this alleviation effect is more pronounced in non-state-owned enterprises, non-heavy-pollution enterprises, and high-tech companies. This paper provides practical insights for companies to optimize sustainable development resource allocation and break financing barriers.