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Abstract

Enhancing the attractiveness of ESG funds and reducing financing constraints are important factors to help new energy vehicle corporations improve their research and development (R&D) capability and sustainable development. This research utilizes data from China’s listed from Shanghai and Shenzhen Stock Exchanges’ new energy vehicle corporations between 2010 and 2024 as a sample. It investigates the positive impact of foreign direct investment (FDI) from ESG funds on the improvement of R&D capabilities and sustainable development of new energy vehicle corporations, and tests the key role of reputation competition in attracting ESG funds for new energy vehicle corporations. The results show that FDI from ESG funds has a significant positive impact on new energy vehicle corporations’ ability to improve R&D and sustainable development, and improving ESG performance can play a positive role, and the higher the ESG score, the more attractive new energy vehicle corporations are to FDI from ESG funds. The specific mechanism analysis suggests that new energy vehicle corporations increase their attractiveness to FDI from ESG funds by reducing the volatility and increasing the industry differentiation of ESG performance. This study explores the mechanism of deep integration between FDI from ESG funds and new energy vehicle corporations from the perspective of reputation competition, providing empirical support for new energy vehicle corporations to reduce financing constraints by improving ESG performance, thereby helping new energy vehicle corporations to enhance R&D and sustainable development capability.

Plain Language Summary

How New Energy Vehicles Stand Out in the Global Competition for Green Investment

To make the new energy vehicle (NEV) industry run faster and farther, the key lies in two things: first, to make it easier for these companies to get money to develop new cars, and second, to make these companies do better in environmental protection, social responsibility, and corporate governance (ESG). We studied new energy vehicle companies(NEVs) listed on China’s A-share market from 2010 to 2024 and found that funds that focus on ESG have a significant impact on their research and sustainable development. We also found that ESG performance is important. Simply put, the higher ESG performance is, the more willing ESG funds are to invest in them. This ESG performance not only stabilizes a company’s reputation, but also allows different companies to stand out in the competition, thereby attracting more foreign direct investment (FDI) from ESG funds. Our research explains why FDI from ESG funds are willing to invest in the NEV industry from the perspective of reputation competition, and provides practical evidence to support this. This not only makes it easier for NEVs to raise funds, but also promotes progress in ESG for the entire industry.

Keywords

foreign direct investment (FDI)new energy vehicle corporations ESG funds reputation competition ESG performance

Introduction

New Energy Vehicle (NEV) manufacturers and consumers have significantly contributed to the preservation of the natural world by curbing CO2 emissions. This positive impact stems from new energy vehicle corporations’ alignment with investors’ environmental protection demands, which has garnered the industry substantial acclaim and secured strong investor support for their R&D expenditures (Su et al., 2021). According to Morningstar’s statistics, as of June 2024, ESG funds have surpassed $3 trillion, a significant increase from the $11.45 trillion recorded in 2020 (Grand View Research, 2023). In tandem with the global growth of the new energy vehicle businesses, ESG funds are increasingly being directed into this sector. However, China’s new energy vehicle corporations continue to face challenges in attracting ESG funds through foreign direct investment (FDI).

Adequate capital investment is a key means to accelerate technological innovation in the new energy vehicle industry. With the reduction of subsidies for new energy vehicles in China, international capital, as a capital supplement for new energy vehicle corporations, undoubtedly can greatly affect the sustainable development of enterprises in the future. Since 2020, the opportunities for startup new energy vehicle corporations to secure new investments have been diminishing (Tian et al., 2022). Investors’ skepticism toward green corporations has caused them to retain interest solely in green corporations (Geng et al., 2024). Amid frequent negative impacts on China’s national image and intensifying reputation battles among new energy vehicle corporations, the challenge of attracting foreign direct investment (FDI) for new energy vehicle corporations is growing. Despite a 30.1% and 32% surge in production and sales volumes (China Association of Automobile Manufacturers, 2024), respectively, in the first quarter of 2024, overall FDI in the new energy vehicle industry sector declined by 57.1% (EasyMoney, 2024). Meanwhile, the local government funding that new energy vehicle corporations have long depended on has also decreased in tandem with the slowdown of China’s GDP growth (Patchell et al., 2024). This has created an urgent need to identify alternative funding sources, such as ESG funds, to support investment through FDI. In contrast to TSLA, which is projected to see a 2% decline in its total production capacity in 2024, investment levels are expected to surge by 33.98% (Sina, 2025). Notably, a substantial proportion of these new investments will stem from investors’ preferences for green business ventures (Lyu et al., 2023). This suggests that new energy vehicle corporations will hold strong appeal for investors with green preferences, but attracting these investors remains pivotal to alleviating the financing constraints faced by Chinese new energy vehicle corporations. Historical research indicates that financial constraints significantly dampen the R&D enthusiasm, ultimately hampering the speed and efficiency of corporate R&D efforts, and potentially undermining their market competitiveness (Beladi et al., 2021). It is anticipated that investments in new energy vehicle corporations will yield returns in two key areas: enhancing sustainable competitiveness (Yuan et al., 2024) and boosting green premiums (Beladi et al., 2021). Over the past 5 years, numerous new energy vehicle corporations have integrated more environmentally friendly (E), socially responsible (S), and effective corporate governance practices (G) into their processes and final products, demonstrating superior ESG performance capabilities. However, does this green capacity translate into the company’s “green reputation”? Can ESG performance accurately reflect a company’s green prowess? Do new energy vehicle corporations with higher ESG performance attract more investment from foreign direct investment? How can new energy vehicle corporations capture the targeted interest of global ESG funds? Addressing these questions is crucial for new energy vehicle corporations to attract FDI from ESG funds and alleviate financing constraints.

In light of this, utilizing Chinese new energy vehicle companies listed on the Shanghai Stock Exchanges (https://www.ssecomcn) and Shenzhen Stock Exchanges (https://www.szsecn) from 2010 to 2024, this study endeavors to establish the logical linkage between “ESG performance, FDI from ESG funds, corporations’ R&D capabilities” within the context of China’s new energy vehicle corporations’ development. Due to the fact that the Shanghai and Shenzhen Stock Exchanges are the most direct sources of data for Chinese A-share listed companies, the financial data used in the subsequent indicator construction is obtained from the APIs of the aforementioned exchanges and centrally recorded in the CSMAR database (https://www.csmar.com). This involves investigating the influence of ESG performance on drawing FDI to China’s new energy vehicle corporations sector and elucidating its underlying transmission mechanisms. Amidst lower investor scrutiny and heightened reputation-based competition among new energy vehicle corporations, this approach offers a novel perspective for researching and augmenting the sector’s capability to attract ESG funds.

This study may offer the following marginal contributions: Firstly, while existing literature predominantly provides broad descriptions from the perspectives of technological innovation and green loan financing constraints, it has not specifically analyzed the impact of ESG performance on NEV corporations, particularly in attracting FDI from ESG funds. This study enriches the research on FDI from ESG funds for new energy vehicle corporations by adopting this innovative perspective, thereby offering a new pathway for advancing the financing in the NEV sector. Second, unlike the prevailing literature on NEV financing, which mainly focuses on the constraints imposed by green policies, subsidies, and loans, this study concentrates on examining the attention dividend derived from FDI sourced from ESG funds. It thereby extends the scope of this literature to a broader domain of deep integration between green finance and the real economy. Third, this study integrates the innovative Roll model to develop a comprehensive mechanism model that encompasses ESG performance. From an enterprise perspective, it elucidates the role of ESG performance in empowering FDI from ESG funds for new energy vehicle corporations. It reveals that ESG performance primarily enhances the attractiveness of new energy vehicle corporations to FDI from ESG funds, reduces financing costs, and promotes reputation through their ESG performance in the FDI from ESG funds market. This research finding represents an innovation in both theoretical and practical domains.

All the hypotheses examined in this study have been demonstrated to be statistically significant. To minimize the interference from sample selection bias, sample autocorrelation, and heteroscedasticity, and to further enhance the reliability of the empirical results, this study employed a range of robustness tests in addition to the baseline model. These tests included extending the observation window, substituting the core dependent variable, explanatory variables, and baseline variables, as well as re-analyzing the baseline model using sys-GMM model. The outcomes align with the baseline regression, and the detailed rationale for the extended analysis is provided in Appendix.

Literature Review and Hypotheses

FDI From ESG Funds and New Energy Vehicle Corporations

Up to now, the academic community has mainly studied the financing constraints of new energy vehicle corporations from both regulatory and non regulatory perspectives (Wu & Qin, 2024; Xia et al., 2022; Xing et al., 2021). Y. Liu et al. (2021) found that regulations can encourage the financial industry to finance new energy vehicle companies, thereby promoting innovative development in the new energy vehicle industry. However, Su et al. (2021) and Karplus et al. (2021) believe that in practice, regulations often have problems such as “lax regulatory standards” and “endogenous law enforcement.” Therefore, numerous scholars have initiated efforts to explore the financing constraints of new energy vehicles from non-regulatory angles, including technological innovation (Khan et al., 2021), reputation competition (Buhmann & Criado, 2023; Zhao et al., 2021), and product competition (Ma et al., 2023). Notably, Ma et al. (2023) have underscored the pivotal role of high-tech innovation capabilities in attracting domestic ESG capital for new energy vehicles.

The research on leveraging FDI to foster the innovative advancement of new energy vehicles within historical literature predominantly emphasizes the integration of advanced technology, the recruitment of international talent, and the mitigation of barriers to international market entry (Li et al., 2022; S. Liu et al., 2023). Li et al. (2022) believe that leveraging FDI will promote enterprises to acquire international new technologies in key areas while obtaining funds, thereby reducing technology development costs. However, Yang et al. (2021) believe that this development method of introducing technology through FDI is not conducive to China’s independent research and development of new energy vehicles. S. Liu et al. (2023) believe that utilizing FDI can help companies reduce the communication costs of introducing high-end overseas talents and effectively improve their international management level, thereby increasing their sustainable development capabilities. However, H. Zhang and Liu (2022) believe that talent mobility is not directly related to FDI. Kaczmarczyk and Flassbeck (2023) believe that FDI can help companies better integrate into the global market and have the opportunity to actively participate in the formulation of international rules and standards, and Parameswar et al. (2023) and Ahmad and Oriani (2022) enhance their international discourse power through high standard technological output. Belderbos et al. (2024) believes that localizing overseas production can also enhance companies’ integration into the global market, the competitiveness of international products is not directly related to capital structure.

Chow and Fung (2025) conducted a study on 38 OECD countries, including China, using a gravity model and found that ESG rules can promote high R&D enterprises in these countries to obtain more overseas direct investment, thereby improving their R&D and sustainable development capabilities. This viewpoint is partially confirmed by Chipalkatti et al. (2021), who pointed out that in the current trend of declining foreign direct investment flows, high ESG performing commodity importing countries can still obtain more FDI. Based on the foregoing analysis, this study proposes Hypothesis 1:

H1: FDI from ESG funds will significantly improve the R&D capability of new energy vehicle corporations and help them develop sustainably.

ESG Performance and FDI From ESG Funds

The existing literature mainly focuses on implementing ESG strategy and ESG funds’ innovation preference, and ignoring the potential dividends of ESG funds from FDI. On the one hand, ESG performance is key to easing financing constraints, as it can mitigate these issues for firms, particularly in markets skeptical about new technologies (Gupta, 2023). Capital markets often overreact to the hype around financing new technologies, leading to inflated investor expectations for high returns from ESG efforts in sectors like new energy vehicles (Murray & Fisher, 2023). While technology can offer excess returns, improvements in ESG performance can draw consistent investor focus on green technologies (Bretscher et al., 2023; Febra et al., 2023; Poddar et al., 2024). Thus, enhancing ESG performance can help new energy vehicle companies gain acceptance for green technologies, reduce market noise, and alleviate financing constraints. This suggests that ESG performance may have a financing multiplier effect for these companies. On the other hand, new energy vehicle companies, reflecting both technological progress and manufacturing prowess, are becoming a symbol of national technological advancement. As ESG funds concentrate on a narrow set of attributes, this leads to competition among these companies (Parveen et al., 2020). Countries will vie for reputation in this sector, with companies that have advanced technologies and make significant environmental and social contributions likely to attract more attention (DowAbramova et al., 2020). Investor confidence is believed to be linked to strong ESG performance, intensifying the race for better ESG metrics (Dow et al., 2024). Ho et al. (2022) view ESG performance as a zero-sum game.

The indicators associated with green preference investment have evolved significantly. From 1970 to 2008, the definition of green investment was relatively ambiguous. Investors with green preferences often prefer to invest in “good” or “not evil” corporations, while the indicators that could distinguish these two types of corporations focused on the company’s disclosure of pollution costs, social responsibility, and related reputation (Cornell, 2021). In response to systemic risks in the financial system during 2008, more investors abandoned the investment goal of “anchoring high returns” and pursued a more diversified asset portfolio (Lee et al., 2024; Zeng et al., 2024). To facilitate a more diversified portfolio, a comprehensive evaluation system integrating environmental, social responsibility, and corporate governance—known as ESG—emerged in the U.S. stock market. Since then, an increasing number of researchers have used ESG performance to measure investors’ green preferences (Bretscher et al., 2023). Since 2008, China has progressively conducted research on its own ESG funds in the market and began to measure ESG performance to gauge investors’ preferences. Considering the market liquidity and universality requirements of international capital, the calculation method for China’s ESG performance is largely consistent with that of international ESG standards (Geng et al., 2024).

The performance of ESG indicators has been unsatisfactory, eroding investors’ trust (Abouarab et al., 2024). In the first half of 2024, Barclays data revealed that ESG investments experienced their first capital outflow, leading to a swift cooldown of the ESG investment surge between 2022 and 2023. Some scholars argue that the Russia-Ukraine conflict has triggered widespread energy and inflation crises, compounded by the aggressive interest rate hikes by major global central banks. These factors have directly impacted many high-growth technology corporations in the US and Europe, which had previously demonstrated strong ESG performance (Tsang et al., 2024). Amidst these risks, investors are now seeking high ESG performance assets that are less susceptible to the aforementioned external shocks (Katsampoxakis et al., 2024).

Furthermore, studies indicate that since 2022, numerous ESG investments in the US and Europe have strayed from their original objectives, morphing into “radical partisan behavior disguised as corporate governance solution” and “political weapons.” This shift has elicited strong aversion from investors (Parchomovsky & Chaim, 2024). Concurrently, Chinese new energy vehicle corporations, recognized as high-quality assets with robust ESG performance, are expected to remain unaffected by these factors, positioning them as more attractive alternative investment options. Based on the foregoing analysis, this study proposes Hypothesis 2:

H2: new energy vehicle corporations with higher ESG performance will have more FDI with ESG funds and smaller financing constraints

Assuming that investors in the capital market are based on constant absolute risk aversion, that is, there exists a risky asset $X ~ (μ_{X}, σ_{X}^{2})$ with a stochastic return of and further assuming that the investor initially has n units of the asset and can additionally purchase q units of the asset, it will cost $R (q)$ to purchase q units, and that after the transaction, the risk-return information of the company with ESG performance data will be made public, then the investor’s ultimate wealth in purchasing the asset with ESG performance data is:

W = (n + q) X - R (q)

(1)

Investors will choose to maximize their expected utility function. With reference to the Roll model of market microstructure (Easley & O’Hara, 2023), if there exists an efficient equilibrium for $R (q)$ , the investor needs to be satisfied with the purchase of an asset with ESG performance:

σ_{ε}^{2} (ρ^{2} σ_{n}^{2} σ_{ε}^{2} - 1) - σ_{X}^{2}

(2)

Due to the presence of competition in the capital market, Equation (3) will be valid in scenarios of limited attention within the capital market, thereby motivating investors to acquire assets with ESG performance data. First-order maximization of the variables in Equation (3) is found:

\partial σ_{X}^{2} / \partial k_{1} < 0, \partial σ_{ε}^{2} / \partial k_{1} > 0, \partial σ_{n}^{2} / \partial k_{1} > 0, \partial ρ / \partial k_{1} < 0

(3)

The results of Equation (2) show that in the case of limited attention, when investors buy assets with ESG performance data, firms with higher ESG performance ( $μ_{X}$ ) can obtain higher attention and can obtain investment, and the results of Equation (3) show that the conditions affecting their obtaining investment are the asset ESG’ volatility ( $σ_{X}^{2}$ ), market noise ( $σ_{ε}^{2}$ ), investors’ original asset risk ( $σ_{n}^{2}$ ), correlation of different asset ESG (ρ), in which higher ESG performance means ( $μ_{X}$ ), will make the enterprise obtain higher investment amount, which indicates that new energy vehicle corporations can obtain more ESG funds, and smaller ESG volatility ( $σ_{X}^{2}$ ), will make the assets with ESG performance data obtain higher This suggests that new energy vehicle corporations with smaller ESG volatility and lower risk of ESG performance data can obtain more ESG funds. At the same time, a greater correlation between the ESG performance of assets (ρ) will make the enterprise obtain higher investment amount, which indicates that the greater the ESG performance’ difference between the corporations in the industry, then the new energy vehicle corporations with higher ESG performance can obtain more ESG funds. Overall, the model shows that the new energy vehicle corporations in the market have higher ESG performance, more significant ESG performance differences between corporations and smaller ESG performance fluctuation. Overall, the model shows that new energy vehicle corporations have higher ESG performance, more significant ESG differences among corporations and smaller ESG fluctuations will significantly affect the investment.

Historical research suggests that the strictness of ESG regulations and restrictions on FDI inflows as the main body vary by country. J. Wang et al. (2023) believes that ESG regulations are an important influencing factor for companies to attract FDI. Since China announced its carbon peak and carbon neutrality targets at the 75th United Nations General Assembly General Debate in September 2020, ESG regulations have gradually become stricter. Hunjra et al. (2024) believe that stricter ESG regulations will reduce the inflow of FDI, while Wang et al. (2023) argue that improvements in ESG can attract foreign investment, indicating that national ESG regulations will add additional financing constraints for new energy vehicle companies to obtain FDI from ESG funds. However, there is no unified evidence on whether companies with good ESG performance can significantly attract international capital inflows and provide financial support for corporate research and market expansion. Based on the foregoing analysis, this study further proposes Hypothesis 3:

H3: new energy vehicle corporations increase their attractiveness to FDI with ESG funds by improving their ESG performance, reducing the volatility of ESG performance and widening the gap between their ESG performance and that of their peers (see Figure 1).

Figure 1.

Theoretical mechanisms of ESG competition for new energy vehicle corporations’ FDI from ESG funds.

Materials and Methods

Materials Description

This study constructs an unbalanced panel data of new energy vehicle corporations from 2010 to 2024 for empirical analysis, in which the new energy vehicle corporations’ list (799 listed corporations) comes from the definition of Class I and Class II industries of the Shanghai and Shenzhen Stock Exchanges (SSSE) database. The data for constructing explained, explanatory, control, and mechanisms variables is sourced from the CSMAR database (C. Liu et al., 2022). The indicators for constructing the expression of power level come from China Sino-Securities index’s (CSI) ESG database, which is constructed with reference to the international mainstream methodology and practical experience, drawing on the core essence of international ESG and combining the Chinese national conditions and market characteristics. Currently China Securities Index (CSI) data counts the ESG ratings (https://www.chindices.com/esg-ratings) of corporations that account for 85% of A-share corporations listed on the Shanghai and Shenzhen exchanges, and has been recognized by historical research as the most comprehensive and reliable environmental microeconomic data in China. In addition, in order to prevent outliers from interfering with the results, this study shrinks all continuous variables by 1% up and down, and refers to the research for the following screening: excluding ST corporations and corporations with more missing data, and excluding corporations that change their main business. The ST stock system is a unique delisting risk warning system for listed corporations in China. The core of this system is the special treatment implemented regarding the restrictions on the daily price fluctuation range and the requirements for information disclosure. When a listed corporation’s stock is subject to delisting risk warning, the abbreviation “*ST” is added before the corporation’s stock short name to distinguish it from other stocks. When a listed company’s stock is subject to other risk warnings, The abbreviation “ST” is added before the corporation’s stock short name to distinguish it from other stocks. These two types of stocks are collectively referred to as ST corporations in the securities market. The final sample involves 747 listed corporations with a total of 6,385 observations.

Variable Selection and Description

Core Explanatory Variables (GFDI)

As there exists no distinct database for ESG fund investments to quantify the investment in new energy vehicle corporations, the relatively modest scale of ESG funds in China renders them insufficient to emerge as formidable institutional investors. pertinent studies opt to utilize foreign direct investment as a proxy indicator to gauge FDI (He et al., 2022; Xu & Li, 2021). Considering the availability of indicators and China’s foreign exchange control requirements, we will compile a list of companies that mention “ESG funds” in their annual reports, and separately calculate their quarterly foreign direct investment (GFDI) and their proportion in total investment (GFDIn) to reflect the FDI from ESG funds (GFDI) of new energy vehicle companies and their ability to attract FDI from ESG funds, which is sourced from CSMAR database’s sub database of annual reports of listed companies (https://libdb.ucass.edu.cn/pisdata.csmar.com/). The larger the GFDI indicator, the stronger the ability of new energy vehicle companies to absorb FDI from ESG funds.

Explained Variables (GR)

Drawing on historical research, this study selects the growth rate of listed corporations’ R&D expenses (GRB) as a proxy variable for examining the R&D capability of new energy vehicle corporations, and the growth rate of profit from main business (GRP) as a proxy variable for examining the sustainable development of new energy vehicle corporations (Wu et al., 2022) from CSMAR database. Since the higher the sustainable development ability of a company, the smaller the internal financing constraints, and more likely to support the company’s future R&D through internal financing, thus forming an endogenous relationship between GRB and GRP, in order to reduce the impact of endogeneity of the internal financing constraints on the regression results, this study adopts the following model:

GR P_{it} = α + β GR B_{it} + u_{t}

(4)

G R_{it} = \frac{\hat{GR P_{it}} - Min \hat{GR P_{it}}}{Man \hat{GR P_{it}} - Min \hat{GR P_{it}}}

(5)

In Equation (5) fitted value of GRP calculated, and the indicator of the firm’s R&D capability and sustainability level (GR) constructed using normalization after controlling for endogeneity due to internal financing constraints.

Mechanism Variables (ESG)

This study selects ESG scores from the CSI ESG database to construct three mechanism indicators (https://www.chindices.com/files/). Given that information disclosure for the implementation of ESG strategies is not mandatory in China, this database—the most comprehensive repository of ESG information in the country—still exhibits 21.7% missing values in the sample companies (see Appendix Table A1). This gap renders it impractical to directly gauge the sustainable development level of new energy vehicle corporations using this variable. First, based on the research findings, ESG scores ranging from C to AAA are each assigned a value between 1 and 99, with no score assigned a value of 0. To construct the ESG performance indicator (lnESG), a higher score signifies a higher ESG performance of the new energy vehicle corporations. Second, the absolute value of the annual change in ESG performance (lnESG) is calculated to construct the ESG performance volatility indicator (VarESG). If VarESG is zero, it indicates no fluctuation in the NEV’s ESG performance; if VarESG is greater than zero, it indicates that the new energy vehicle corporations experienced ESG performance fluctuations that year, with a higher VarESG value signifying greater volatility. Third, the total ESG performance of all listed corporations (TotalESG) is calculated, and the gap between TotalESG and the sample’s ESG performance (diffESG) is determined. The larger the diffESG is, the new energy vehicle corporations have higher ESG performance than other corporations. In addition, this study selects the environmental sub-indicator (E) of the ESG calculation in the ESG database to construct green performance (lnE), green performance volatility (VarE) and green performance gap (diffE) as robustness test indicators.

Control Variables (Controls)

In order to further improve the reliability of the results of this study, referring to the existing related studies, the following variables are finally selected as control variables in the empirical model: enterprise size (Size), return on total assets (ROA), enterprise age (Age), gearing ratio (Lev), whether it is a state-owned enterprise (SOE), and the dummy variables for the year and area (Year and Area) from CSMAR database. The main variable definitions and descriptive statistics are shown in Appendix.

Model Setting

This study set up the following model to identify the impact of FDI from ESG funds on the R&D and sustainable development of new energy vehicle corporations:

G R_{it} = α + β GFD I_{it} + \sum γ Control s_{it} + μ_{p} + δ_{t} + ε_{it}

(6)

In Equation (6), the subscripts, respectively, represent corporations and years. GFDI is the attractiveness of FDI from ESG funds for new energy vehicle corporations, and the core explanatory variable GR represents the degree of R&D capability and sustainable development of new energy vehicle corporations. The size of the coefficient β measures the extent of the influence of FDI from ESG funds on the degree of R&D and sustainable development of new energy vehicle corporations. Controls are a series of control variables, and this study also controls for area and year fixed effects, for random disturbance terms, and for clustering the standard errors to the level of new energy vehicle corporations.

Furthermore, the subsequent model is employed to examine the mechanisms through which ESG performance influences NEV’s FDI sourced from ESG funds. In this model, represents the mechanism variables, while the remaining components align with the baseline model:

M_{it} = α + β GFD I_{it} + \sum^{γ} Control s_{it} + μ_{p} + δ_{t} + ε_{it}

(7)

Results

Benchmark Regression

The results of the benchmark regression are shown in Table 1, and columns (1) to (3) test whether there is a relationship between GFDIn and the GR of new energy vehicle corporations. The results show that, under other constant conditions, compared to corporations that have not been invested in by FDI from ESG funds, their R&D capabilities and sustainable development will significantly decrease. Columns (4) to (6) examine the relationship between the level of GFDI and GR of new energy vehicle corporations. The results show that regardless of controlling for cross fixed effects and individual effects at the company level, new energy vehicle corporations with a higher proportion of FDI from ESG funds will significantly have higher R&D and sustainable development levels, which confirms H1.

Table 1.

Benchmark Regression.

	(1)	(2)	(3)	(4)	(5)	(6)
Variable	GR	GR	GR	GR	GR	GR
GFDIn	0.0011** (0.00)	0.0052*** (0.00)	0.0034** (0.00)
GFDI				0.0052*** (0.00)	0.0245*** (0.00)	0.0128** (0.00)
Size			−0.0001 (0.00)			−0.0001 (0.00)
ROA			0.0008 (0.00)			0.0008 (0.00)
Lev			−0.0001 (0.00)			−0.0001 (0.00)
Age			0.0006** (0.00)			0.0006** (0.00)
SOE			0.0015 (0.00)			0.0015 (0.00)
Area FE		Y	Y		Y	Y
Year FE		Y	Y		Y	Y
_cons	0.0001 (0.00)	−0.0059*** (0.00)	−0.0035 (0.01)	−0.0001 (0.00)	−0.0059*** (0.00)	−0.0035 (0.01)
N	24,445	24,445	24,443	24,445	24,445	24,443
Adj R²	.68	.61	.64	.71	.63	.65

Note. The standard error of the T-test is given in brackets. In addition, the p-values are * as p < 0.1. ** as p < 0.05. *** as p < 0.01.

The reason FDI from ESG funds can enhance the R&D and sustainable development of new energy vehicle corporations lies in the fact that capital with green attributes can offer more substantial green innovation investment for new energy vehicle corporations. Simultaneously, FDI from ESG funds also draws greater attention to new energy vehicle corporations, thereby easing their financing constraints, which ultimately translates into improved enterprise R&D and sustainable development capabilities. The practices of certain new energy vehicle corporations in Anhui province, China, have further substantiated the aforementioned hypothesis. For instance, during NIO’s $1.085 billion financing from February 2019 to March 2020, several Asian ESG funds were involved. Following this capital infusion, NIO promptly escalated its R&D expenditures. From 2019 to 2023, NIO’s cumulative R&D expenses soared to 35.776 billion yuan, constituting over 20% of its annual total revenue. In 2024, NIO achieved several "zero breakthroughs" in its automotive operating system. Consequently, the regression analysis underscores that FDI from ESG funds exerts a positive influence on mitigating financing constraints and bolstering green innovation in new energy vehicle corporations, thereby fostering the sustainable development of these corporations.

Analysis of Mechanisms

lnESG

While the benchmark results confirm that ESG funds can improve the R&D and sustainable development of new energy vehicle corporations, what is the way for new energy vehicle corporations to increase the attractiveness of FDI from ESG funds? The results in column (2) of Table 2 show that when lnESG is used as the independent variable and GFDIn is used as the dependent variable, the estimated coefficients of lnESG are significantly positive at the 1% level, indicating that ESG performance can effectively improve the attractiveness of FDI from ESG funds. Comparing columns (1) and (3), it can be seen that after increasing the lnESG, GFDIn still has a significant positive impact on the R&D and sustainable development level (RG) of new energy vehicle corporations, and the influence coefficient of column (3) is significantly larger than that of column (1), which indicates that new energy vehicle corporations with higher performance of ESG will more effectively improve the attractiveness of FDI from ESG funds and positively affect the R&D and sustainable development level of corporations. The coefficient of influence is significantly larger than that of column (1), indicating that the higher ESG performance in new energy vehicle corporations will more effectively enhance the attractiveness of FDI from ESG funds and positively affect the R&D and sustainable development level. Similarly, columns (4) to (6) also demonstrate that the performance of ESG is a key mechanism for new energy vehicle corporations to attract FDI from ESG funds.

Table 2.

Mechanism Testing of ESG Performance.

	(1)	(2)	(3)	(4)	(5)	(6)
Variable	GR	lnESG	GR	GR	lnESG	GR
GFDIn	0.0034*** (0.00)	0.0114*** (0.00)	0.0037*** (0.00)
GFDI				0.0128*** (0.00)	0.0320* (0.02)	0.0133*** (0.00)
lnESG			0.0160*** (0.01)			0.0159*** (0.01)
Controls	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y
Area FE	Y	Y	Y	Y	Y	Y
_cons	0.4188*** (0.01)	4.2143*** (0.03)	0.3511*** (0.03)	0.4157*** (0.01)	4.2111*** (0.03)	0.3483*** (0.03)
N	24,443	24,438	24,438	24,443	24,438	24,438
Adj R²	.354	.359	.357	.355	.362	.358

Note. The standard error of the T-test is given in brackets. In addition, the p-values are * as p < 0.1. ** as p < 0.05. *** as p < 0.01.

VarESG and diffESG

According to Table 2, FDI from ESG funds is mainly used to determine the investment value of new energy vehicle corporations by obtaining information on their ESG performance, but it is not clear what ESG performance measures new energy vehicle corporations have taken to gain attractiveness in the ESG funds. The volatility of the ESG performance (VarESG) represents the sustainability of the new energy vehicle corporations’ ability to provide green innovation products and technologies. If the fluctuation is more violent, the new energy vehicle corporations may be in danger; at the same time, the difference in the ESG performance of the new energy vehicle corporations enterprise and other corporations (diffESG) represents the enterprise’s production efficiency achieved by the introduction of the green innovation products and technologies, which is a high-level factor rich in knowledge and information, and helps to improve the overall efficiency of the enterprise, which contributes to the improvement of the enterprise’s competitiveness, which is extremely important for the ESG funds to obtain the expected return, thus influencing the investment decision of the ESG funds (Baldi & Pandimiglio, 2022). In order to verify the existence of the above two ESG performances and further refine the mechanism of FDI from ESG funds attractiveness of new energy vehicle corporations, this study conducted the regression analysis in Table 3.

Table 3.

Mechanism Regression.

	(1)	(2)	(3)	(4)	(5)
Variable	GR	GR	GR	GR	GR
GFDI	0.0137*** (0.00)	0.0132*** (0.00)	0.0124*** (0.00)	0.0128*** (0.00)	0.0128*** (0.00)
VarESG	−0.0009*** (0.00)
diffESG		0.0004*** (0.00)
lnE			0.0102*** (0.00)
VarE				−0.0001 (0.00)
differ					0.0001 (0.00)
Controls	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y
Area FE	Y	Y	Y	Y	Y
_cons	0.4154*** (0.01)	0.4169*** (0.01)	0.4482*** (0.01)	0.4156*** (0.01)	0.4151*** (0.01)
N	24,443	24,438	24,438	24,443	24,438
Adj R²	.356	.359	.358	.355	.355

Note. The standard error of the T-test is given in brackets. In addition, the P-values are * as p < 0.1. ** as p < 0.05. *** as p < 0.01.

The dependent variables in columns (1) and (2) are used to measure the two ESG performance (VarESG, diffESG). The VarESG estimation coefficient is significantly negative, and the diffESG estimation coefficient is significantly positive, indicating that ESG competition can effectively enhance the attractiveness of FDI from ESG funds. Columns (3) to (5) of Table 3 were used to calculate the robustness of mechanism analysis using the green performance (lnE), green performance volatility (lnVarE), and gap between green performance (lndiffE) specifically for the green (E) indicator in ESG. The results were consistent with columns (6) of Table 2 and columns (1) and (2) of Table 3, but the coefficients of lnVarE and lndiffE have not yet passed statistical tests.

Heterogeneity Analysis

A previous study found from a holistic perspective that new energy vehicle corporations have increased their attractiveness to FDI from ESG funds through ESG performance, thereby promoting their R&D and sustainable development. However, will this conclusion vary depending on the type and scale of ownership, and will its specific pathways of action be consistent? We further studied from the perspective of heterogeneity, attempting to discover the impact of these differences on the path of corporate ESG performance and the attraction of FDI from ESG funds.

Differences in Ownership

According to the enterprise ownership, the sample can be divided into state-owned corporations (SOE) and non-state-owned corporations (NonSOE). The regression results are shown in panel A of Table 4. The regression coefficients of SOE and NonSOE are both significantly positive. However, in NonSOE, the attractiveness of investors was much greater than that of SOE, and the coefficient difference was tested by Fisher’s and Chow’s test. The study continues to explore the reasons for the differences in attractiveness of FDI from ESG funds between SOE and NonSOE. The regression results are shown in panel B of Table 4. Although the VarESG coefficient is significantly negative in all corporations, the diffESG coefficient is not significant in all corporations. This may be due to the long-term control of the ESG funds market by the ESG of US and European countries, making NonSOE new energy vehicle corporations relatively more attractive to FDI from ESG funds and more capable of competing for ESG. This ability to compete for ESG not only better ensures that FDI from ESG funds obtains expected capital returns and reduces investment risks, but also makes it easier to absorb organizational innovation of FDI from ESG funds and improve corporate governance.

Table 4.

Heterogeneity by Ownership Structure.

	(1)	(2)	(3)	(4)
	GR	GR	GR	GR
Variable	SOE	NSOE	SOE	NSOE
	Panel A
GFDIn	−0.0037 (0.00)	0.0035*** (0.00)
GFDI			−0.0019 (0.00)	0.0130*** (0.00)
lnESG	0.0064 (0.01)	0.0161*** (0.01)	0.0061 (0.01)	0.0161*** (0.01)
Controls	Y	Y	Y	Y
Year FE	Y	Y	Y	Y
Area FE	Y	Y	Y	Y
_cons	0.0648** (0.03)	0.4242*** (0.01)	0.0644** (0.03)	0.4211*** (0.01)
N	694	23,749	694	23,749
Adj R²	.398	.355	.388	.356
Fisher test	0.01***		0.093*
Chow test	0.164***		0.172***
	Panel B
GFDIn	0.0094*** (0.00)	0.017*** (0.00)	0.0095*** (0.00)	0.018*** (0.00)
VarESG	−0.0025** (0.00)	−0.0024*** (0.00)
diffESG			0.0001 (0.00)	0.000 (0.00)
Controls	Y	Y	Y	Y
Year FE	Y	Y	Y	Y
Area FE	Y	Y	Y	Y
_cons	0.0090 (0.01)	−0.0066*** (0.00)	0.0090 (0.01)	−0.0073*** (0.00)
N	694	23,749	694	23,744
Adj R²	.313	.344	.307	.341
Fisher test	0.076***		0.089*
Chow test	0.172***		0.171***

Note. The standard error of the T-test is given in brackets. In addition, the P-values are * as p < 0.1. ** as p < 0.05. *** as p < 0.01.

However, as SOE’s often have to undertake more social responsibilities and green environmental protection tasks, they should better match the investment preferences of FDI from ESG funds. However, due to the failure to compete for the international market ESG, it may increase the financing constraints of SOE’s new energy vehicle corporations internationally. Based on the above analysis, NonSOE’s have more advantages in attracting FDI from ESG funds through the improvement of their ESG performance. Therefore, overall, the positive impact of attracting FDI from ESG funds on NonSOE’s is better.

Differences in Size

The scale of new energy vehicle corporations is a pivotal factor influencing the allure of FDI from ESG funds. On one hand, the enlargement of enterprise size may complicate investors’ efforts to secure a substantial proportion of control and board seats, thereby dampening their enthusiasm to invest. On the other hand, the growth in enterprise size can also yield economies of scale, which in turn lowers the unit R&D cost and mitigates the enterprise’s risk, thereby diminishing the overall investment risk (Zhang et al., 2023). This study divided corporations into large and small corporations for regression based on the median logarithm of total assets. As shown in panel A of Table 5, the estimated coefficient for large corporations is not significant, while the estimated coefficient for small corporations is significantly positive at the 1% level. In other words, small corporations are more attractive to FDI from ESG funds than large corporations, and can more effectively improve innovation capabilities and sustainable development levels after receiving support from FDI from ESG funds.

Table 5.

Heterogeneity with Different Size.

	(1)	(2)	(3)	(4)
	GR	GR	GR	GR
Variable	Big	Small	Big	Small
	Panel A
GFDIn	−0.0009 (0.00)	0.0018*** (0.00)
GFDI			0.0063*** (0.00)	0.0116*** (0.00)
lnESG	−0.0141*** (0.00)	−0.0128*** (0.00)	−0.0141*** (0.00)	−0.0129*** (0.00)
Controls	Y	Y	Y	Y
Year FE	Y	Y	Y	Y
Area FE	Y	Y	Y	Y
_cons	0.0446*** (0.01)	0.0310 (0.02)	0.0443*** (0.01)	0.0316 (0.02)
N	10,744	13,694	10,744	13,694
Adj R²	.062	.049	.063	.051
Fisher test	0.697**		0.682**
Chow test	0.17***		0.11***
	Panel B
GFDI	0.0059*** (0.00)	0.0105*** (0.00)	0.0063*** (0.00)	0.0113*** (0.00)
VarESG	−0.0029*** (0.00)	−0.0025*** (0.00)
diffESG			0.0002*** (0.00)	−0.0001 (0.00)
Controls	Y	Y	Y	Y
Year FE	Y	Y	Y	Y
Area FE	Y	Y	Y	Y
_cons	−0.0145*** (0.00)	−0.0228*** (0.00)	−0.0162*** (0.00)	−0.0248*** (0.00)
N	10,744	13,699	10,744	13,694
Adj R²	.065	.052	.060	.050
Fisher test	0.651***		0.656***
Chow test	0.13***		0.07***

Note. The standard error of the T-test is given in brackets. In addition, the P-values are * as p < 0.1. ** as p < 0.05. *** as p < 0.01.

Consistent with the previous approach, Table 5 Panel B shows the differences in the mechanisms of ESG performance between large and small corporations. It can be observed that the competition for ESG has increased the attractiveness of FDI from ESG funds and reduced the financing constraints of both large and small corporations. The coefficients for the volatility mechanism of ESG have been statistically tested and the direction of the coefficients is consistent with Table 5. However, the mechanism coefficients for the differences in ESG performance of small corporations are not significant and have different directions. This indicates that small new energy vehicle corporations with lower ESG performance volatility will be able to more significantly gain international ESG performance. However, when choosing to invest in new energy vehicle corporations of different sizes, FDI from ESG funds will not pay much attention to the differences between the average ESG performance of corporations and the industry. Therefore, considering all the mechanisms for ESG performance, it can be concluded that the main reason why small size is more attractive to FDI from ESG funds is their higher level of ESG performance.

Discussion and Conclusion

Discussion

Utilizing micro-enterprise data spanning from 2010 to 2024, the research reveals that FDI sourced from ESG funds significantly boosts the R&D capabilities of new energy vehicle corporations, thereby promoting their sustainable growth. Mechanism testing indicates that the ESG performance of new energy vehicle corporations substantially influences the investment decisions of ESG fund-based FDI, primarily by enhancing investment attractiveness. Further analysis demonstrates that higher ESG performance, reduced ESG performance volatility, and greater ESG performance gaps are pivotal mechanisms for attracting FDI from ESG funds. Heterogeneity analysis reveals that, compared to state-owned corporations, non-state-owned corporations are more effective in augmenting the attractiveness of FDI from ESG funds through their ESG performance, leading to more pronounced improvements in innovation capabilities and sustainable development.

The benchmark research conclusion for hypothesis H1 in this study aligns with the findings of Bretscher et al. (2023) and Su et al. (2021), both of which underscore the positive influence of ESG factors on corporate risk premiums. This further corroborates the significance of reputation competition in the market (Buhmann & Criado, 2023; Zhao et al., 2021) for the sustainable development of companies. Additionally, this study confirms hypothesis H1 and highlights the beneficial role of FDI in the sustainable development of new energy vehicle corporations in China. This finding contrasts with the conclusions drawn by Yang et al. (2021) and H. Zhang and Liu (2022), who, using regional FDI data, suggest that countries and regions reliant on FDI do not improve local R&D capabilities. However, this conclusion is not easily applicable to the field of new energy vehicles, which has relatively low technological barriers.

Meanwhile, this study further validates the viewpoint of Gupta (2023) and Febra et al. (2023) that ESG performance is a key factor in alleviating financing constraints, as evidenced by a sample of new energy vehicle corporations, based on the conclusion of hypothesis H2. Although all companies prioritize ESG, only a few manage to improve their ESG performance and innovation level to stand out in market competition. However, further analysis results differ from the research findings, which have believed that large new energy vehicle corporations face relatively fewer financing constraints; however, their variable selection mainly reflects the investment preferences of domestic industrial funds (Zhang et al., 2024a). Additionally, this study found that international reputation disputes between new energy vehicle corporations may only cause market noise in the short term, but will not affect ESG funds’ preference for FDI. This indicates that ESG funds can, to some extent, identify new energy vehicle corporations with high ESG performance and green innovation capabilities. This means that Tsang et al. (2024) and Katsampoxakis et al. (2024) may be too cautious, fearing that “greenwashing” behavior will undermine investor trust and lead to ESG investment failure.

Furthermore, the analysis of hypothesis H3 in this study reveals that new energy vehicle corporations increase the appeal of ESG funds to FDI by enhancing their ESG performance, stabilizing ESG performance volatility, and expanding the gap in ESG performance relative to their peers. These three mechanisms can more effectively mitigate corporate "greenwashing" behavior, thereby establishing a stronger ESG rating market influence. This influence has, to some extent, supplanted stringent ESG regulations, fostering a conducive environment for investors to effectively channel FDI into companies with superior ESG performance. This aligns with the research methodology of Wang et al. (2023), which indicates that stricter ESG rules are associated with a higher likelihood of attracting FDI. However, this contradicts the findings of Hunjra et al. (2024) regarding macro-level FDI inflow financing restrictions, as the present study did not observe any additional financing constraints on the FDI inflows of new energy vehicle corporations due to stricter ESG regulations.

Policy Recommendations

First, develop differentiated strategies for enhancing expression rights by stakeholder. Given the characteristic that non-state-owned enterprises and small-sized enterprises are more likely to attract international green capital in the competition for expression rights, classified guidance shall be implemented. For non-state-owned enterprises, a “Special Cultivation Program for International Green Expression Rights” shall be established. Leading enterprises with high R&D investment intensity and great export potential (e.g., local growing new energy vehicle enterprises in Anhui Province) shall be selected as pilots to provide customized ESG disclosure consulting services. These enterprises shall be assisted in optimizing information disclosure content in accordance with the standards of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), with a focus on highlighting technological innovation achievements (such as breakthroughs in battery energy density and advancements in autonomous driving technology) and green production practices (such as carbon footprint tracking and the proportion of clean energy use), so as to enhance the attention of international investors. For state-owned enterprises, an “International Image Remodeling Project” shall be launched. In collaboration with industry associations and international public relations agencies, platforms such as international exhibitions and green forums shall be used to systematically demonstrate the fulfillment of social responsibilities (such as the construction of charging pile infrastructure and the establishment of a waste battery recycling system) and long-term investment value of state-owned enterprises in green transformation, thereby eliminating the cognitive bias of the international capital market toward state-owned automobile enterprises. Meanwhile, state-owned automobile enterprises shall be encouraged to carry out cooperation pilots with international green investment institutions, and accumulate experience in international capital cooperation through joint R&D and co-construction of green projects, so as to gradually enhance the influence of expression rights. To address the issue of high volatility in the expression rights of small-sized enterprises, a “Support Plan for the Stability of Expression Rights” shall be introduced. A monthly monitoring mechanism for key ESG indicators shall be established to provide risk early warning services for enterprises, helping them adjust their operation strategies in a timely manner to maintain stable ESG performance. Green expression rights subsidies for small-sized enterprises shall be set up. Enterprises whose ESG scores remain stable for six consecutive quarters and are higher than the industry average shall be given a certain proportion of R&D subsidies or preferential financing guarantees, so as to reduce the impact of fluctuations in their expression rights on the attractiveness to international capital.

Second, establish a collaborative connection mechanism between “International Green Capital and Industrial R&D.” Focusing on key links in the new energy vehicle industry chain (such as power batteries, electric drive systems, and intelligent connected technologies), a “Supply and Demand Connection Platform for International Green Capital” shall be built. A list of R&D needs in the new energy vehicle industry (such as the R&D of solid-state batteries and the industrialization of vehicle-road coordination technology) shall be released regularly to attract precise connections with international green investment institutions. For successfully implemented collaborative R&D projects, tax incentives (such as increasing the additional deduction ratio of R&D expenses to 175%) and government risk compensation shall be provided to reduce the investment risks of international capital. A “Special Fund for Green R&D” shall be established. Enterprises with an international green capital investment ratio of more than 30% and an R&D investment growth rate of more than 20% shall be given supporting fund support, so as to form a positive cycle of “capital investment - R&D breakthrough - improvement of expression rights - more capital inflow.” Based on the advantages of the new energy vehicle industry cluster, a “Regional Green Expression Rights Brand” shall be built. Resources in the industrial chain within the province, such as automobile enterprises, battery suppliers, and charging pile enterprises, shall be integrated. The “White Paper on the Green Development of New Energy Vehicle Industry” shall be compiled to collectively demonstrate the regional industrial green innovation capabilities (such as the carbon emission reduction effects of the entire industrial chain and industrial collaborative innovation cases), attracting international green capital to invest in batches in the form of industrial funds and enhancing the overall attractiveness of the region to international green capital.

Third, enhance the support and assurance system for expression rights. Establish a “Service Platform for International Green Expression Rights of New Energy Vehicles.” Integrate service resources such as the China Securities ESG Database, the resource database of international green investment institutions, and professional consulting institutions to offer “one-stop” services for enterprises. These services include ESG score diagnosis, connection with international capital, and the application of green financial instruments (such as green bond issuance and ESG ETF product cooperation), thereby lowering the threshold for enterprises to improve their expression rights and facilitate cooperation with international capital. Additionally, set up a “Monitoring and Feedback Mechanism for International Green Capital Investment.” Create a joint working group comprising government departments, industry associations, and research institutions to regularly monitor the investment trends of international green capital in new energy vehicle industry. Analyze shifts in investment preferences (such as the increased focus on low-carbon technologies and the circular economy) and factors influencing expression rights. Compile the “Report on International Green Capital Investment in New Energy Vehicle Industry” to provide data support for policy adjustments and optimization of enterprise strategies.

Research Limitations and Future Research

The shortcomings of this study are mainly reflected in two aspects: first, the indicators of international green capital are not yet clear. Although I have tried my best to express the green preference of international investment by targeting industries, conducting micro-level research on enterprises, and selecting relevant indicators, this indicator only has partial objectivity and cannot accurately measure the full investment of international green capital in China’s related industries. Second, the analysis of how the competition for expression rights affects the mechanism by which new energy vehicle corporations attract international green capital is not comprehensive enough. The impact of the competition for expression rights on enterprises is complex and intricate. I have only examined the volatility and differences of expression rights, without comprehensively analyzing other cross-functional mechanisms. In addition, this study has only used quantitative research methods and ignored key qualitative factors such as consumer perception, governance practices, and stakeholder influence, which are crucial for a comprehensive understanding of ESG investment.

During the subsequent research process, the evaluation of international green capital investment preferences will be continuously refined using the latest research methodologies, and the impact mechanism of expression rights competition will be explored in depth. Concurrently, by analyzing the technology spillover from cross-border cooperation among new energy vehicle corporations, I aim to fill the research gap in this domain. This study primarily concentrates on Chinese new energy vehicle companies, and future research will extend its scope through comparative analysis on a global scale to derive more universally applicable insights. Additionally, I will persist in monitoring the correlation between new energy vehicles and consumer perception, governance practices, and stakeholder impact, and gradually integrate these aspects into the research framework in future work.

Footnotes

Appendix

ORCID iD

Man Jin

Ethical Considerations

This article does not contain any studies with human participants performed by any of the authors.

Consent to Participate

Not applicable.

Consent for Publication

Not applicable.

Author Contributions

MAN Jin: Conceptualization, Formal analysis, Writing – original draft, Writing – review & editing: Writing – review & editing, Validation.

Funding

The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was funded by Chaohu University 2024 Discipline Construction Quality Improvement Project, grant number XWZ202405” and Social Science Planning Project of Ma’anshan City, grant number “202503.”

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Data Availability Statement

Data are available to provide on request.

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Mechanism of Attracting Foreign Direct Investment from ESG Funds In The New Energy Vehicle Industry— Evidence from Chinese Corporations

Abstract

Plain Language Summary

Keywords

Introduction

Literature Review and Hypotheses

FDI From ESG Funds and New Energy Vehicle Corporations

ESG Performance and FDI From ESG Funds

Materials and Methods

Materials Description

Variable Selection and Description

Core Explanatory Variables (GFDI)

Explained Variables (GR)

Mechanism Variables (ESG)

Control Variables (Controls)

Model Setting

Results

Benchmark Regression

Analysis of Mechanisms

lnESG

VarESG and diffESG

Heterogeneity Analysis

Differences in Ownership

Differences in Size

Discussion and Conclusion

Discussion

Policy Recommendations

Research Limitations and Future Research

Footnotes

Appendix

ORCID iD

Ethical Considerations

Consent to Participate

Consent for Publication

Author Contributions

Funding

Declaration of Conflicting Interests

Data Availability Statement

References