Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)

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How ESG Performance Shapes Corporate Operating Leverage: Evidence from A-Share Listed Companies in China

Authors
Runjia Wang1, *
1Shandong University, 27 Shanda Nanlu, Jinan, 250100, China
*Corresponding author. Email: 202200272157@mail.sdu.edu.cn
Corresponding Author
Runjia Wang
Available Online 16 September 2025.
DOI
10.2991/978-94-6463-845-5_67How to use a DOI?
Keywords
ESG performance; Operating leverage; Dynamic capabilities theory; Ownership heterogeneity; Sustainable transition; COVID-19 pandemic
Abstract

This study investigates how corporate Environmental, Social, and Governance (ESG) performance reduces operating leverage by enhancing dynamic capability. Using data from Chinese A-share listed firms, we find that ESG practices mitigate fixed-cost rigidity through green innovation, supply chains resilience, and governance transparency. The stabilizing effect of ESG is particularly pronounced during the COVID-19 pandemic, particularly among non-state-owned enterprises, where market-driven incentives promote greater operational adaptability. In contrast, state-owned enterprises exhibit weaker ESG effectiveness due to institutional misalignments between sustainability goals and administrative mandates. Robustness checks using alternative specifications and endogeneity controls confirm the reliability of our findings. By embedding ESG within the framework of dynamic capability, this research extends theoretical insights into how sustainability operates in transitional economies. The research highlights differentiated policy frameworks that will reward more than just superficial ESG compliance, especially in post-crisis restoration and state-owned enterprise reform.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)
Series
Atlantis Highlights in Economics, Business and Management
Publication Date
16 September 2025
ISBN
978-94-6463-845-5
ISSN
2667-1271
DOI
10.2991/978-94-6463-845-5_67How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Runjia Wang
PY  - 2025
DA  - 2025/09/16
TI  - How ESG Performance Shapes Corporate Operating Leverage: Evidence from A-Share Listed Companies in China
BT  - Proceedings of the 2025 6th International Conference on Management Science and Engineering Management (ICMSEM 2025)
PB  - Atlantis Press
SP  - 655
EP  - 667
SN  - 2667-1271
UR  - https://doi.org/10.2991/978-94-6463-845-5_67
DO  - 10.2991/978-94-6463-845-5_67
ID  - Wang2025
ER  -