Drawing on the lens of stakeholder theory, this paper explores the association between ESG disclosure, green finance, and the performance of Chinese firms, while considering the moderating role of competitive edge in terms of financing costs. By integrating ESG disclosure and green finance, firms can efficiently manage their financial resources and operate in an environmentally friendly manner. Besides, to gain stakeholder legitimacy, firms can exploit green finance to balance the triple bottom-line principle of People-Planet-Profit. For empirical investigation, the Two-stage Least-squares Cluster (2SLS-cluster) Regression method and the two-step dynamic System Generalised Method of Moments (Sys-GMM) method are used. The study uses data from a sample of Chinese firms over the period of 2014–2022. We find a positive and significant link between green finance and ESG disclosure. Our results further reveal that the competitive edge of firms in terms of financing costs moderates the relationship between green finance, ESG disclosures, and firm performance. These insights contribute to the extant literature on sustainable finance and have important implications for policymakers.

Cash holding is important for Chinese manufacturing firms coping with the increasing costs of financing and tough economic conditions. This study examines the impact of cash holding on the firm value of Chinese manufacturing businesses. We found evidence that a non-linear relationship exists between cash holding and firm value in these companies. The study reveals that a higher level of cash holding in financially constrained firms negatively affects the firm value, while unconstrained firms with a less cash holding level have a better firm value. Finally, this research is enriched by implementing the novel measure of managerial optimism. Revealed is the interactive role of cash holding and optimism and how they affect firm value. The study concludes that managerial optimism influences a firm’s cash holding decisions, and this is more costly for unconstrained firms.

Facilitating economic opportunities is a critical function of the financial sector, and this contributes significantly towards the attainment of Sustainable Development Goals 10 (SDG-10), which aims to reduce income inequality. This research examines the role of sustainable banking practices in reducing income inequality and achieving SDG-10 under weak rule of law settings. We employed a panel cluster regression model to examine the data collected from 890 banks across 49 nations over a nine-year period (2014–2022). Specifically, we opted to cluster the observations based on industry and year to produce unbiased standard error. The findings reveal that sustainable banking practices are more effective in reducing income inequality, especially in settings with weak rule of law. They also contribute to combating money laundering, which is a significant barrier to achieving SDG-10. The study highlights the importance of transparent and responsible financial transactions in promoting investment opportunities that contribute to sustainable development. Moreover, we find that sustainable banking can accelerate the impact of Fintech in reducing income inequality in weak rule of law settings. The use of Fintech in the financial industry can improve transparency, accountability, and fairness, which are essential for progress towards achieving SDG-10. These findings have significant implications for the expansion of sustainable banking practices in regions with weak institutional frameworks.

This study analyzes the influence of operating capital on a firm’s profitability in the manufacturing sector of China. The study investigates that operating capital develops a non-linear relationship with firm profitability by using the ordinary least square (OLS), fixed effect (FE), and generalized method of moments (GMM) regression. The research reveals that positive operating capital in financially less-constrained firms significantly negatively influences the firm’s profitability. Conversely, negative operating capital in financially constrained firms significantly positively influences the firm’s profitability. Further, we find that financially less-constrained firms design an efficient level of operating capital by holding positive operating capital and negative cash, while constrained firms design an efficient level of operating capital by holding negative operating capital and positive cash. Additionally, we also identify the optimal level of operating capital to increase the firm’s profitability. Generally, we conclude that a firm can design a level of efficient operating capital by trading-off cash with non-cash assets.

This study provides a theoretical argument supported by empirical evidence regarding the impact of sustainable investment practices on the working capital management of small- and medium-sized enterprises (SMEs). The study utilizes panel data on SMEs from 2014 to 2022. Cluster regression methodology is employed to assess the influence of sustainable investment practices on a firm’s working capital, with green finance (GF) as a moderating variable. Results revealed that a firm’s sustainable investment practices significantly and negatively affect its working capital. Additionally, the study identified GF as a moderator in the relation between sustainability and working capital. The findings indicated that firms actively engaging in sustainable investment practices are more efficient in managing working capital for their business operations’ long-term sustainability.

The purpose of this study is to reveal the integration of green finance with environmental, social, and governance (ESG) compliance in firm liquidity. We also explore the non-financial channels like social capital and green innovation through which ESG compliance influences the firm’s liquidity. The study employs two-stage Least Squares (2SLS) and Generalized Method of Movements (GMM) regression analysis to address the endogeneity issues. The results obtained through 2SLS and GMM regression analysis indicate that firms engagement in green finance and ESG compliance help them keep their liquidity low. The findings indicate that firms operating in high-ESG regions have lower liquidity than firms operating in low-ESG regions. Green finance plays an essential role in designing the firm’s long-term strategy to promote sustainable development and address climate change. Green finance helps mobilize funds for sustainable environmental projects and reduces the risk of green investment. It may also improve the firm’s performance and reduce financial constraints. The government should introduce the clear legislation, incentives, and standards to promote the green finance for sustainable investment. The private sector can implement the green finance practices by integrating ESG disclosures with firm investment decisions, and innovation processes. This research study contributes to the existing corporate literature by analyzing the integration of ESG disclosures with green finance in the presence of social capital and green innovation in firm liquidity.