The Influence of Institutional Pressures on Environmental, Social, and Governance Responsibility Fulfillment: Insights from Chinese Listed Firms

Abstract

Grounded in institutional theory, this study uses a sample of A-share listed companies from 2009 to 2023 to empirically examine the effects of coercive, mimetic, and normative pressures on corporate ESG responsibility. The results indicate that coercive and mimetic pressures significantly promote ESG responsibility fulfilment, while normative pressures have a negative impact. This research expands the application of institutional theory to ESG practices, offering valuable insights for policymakers, regulators, and corporate managers. By strengthening supervision, promoting industry best practices, and fostering social responsibility awareness, corporate ESG fulfilment can be further advanced, driving sustainable development.

1. Introduction

Widespread evidence suggests that environmental, social, and governance (ESG) practices, as a development philosophy that emphasizes non-financial factors, significantly impact the long-term value creation and success of companies [1]. In addition to contributing to long-term sustainable development and enhancing overall value, implementing an ESG strategy enables companies to align with the ESG regulatory policies introduced by governments worldwide. For example, in 2018, the UK’s revised Corporate Governance Code required premium-listed companies to report on how their corporate governance supports long-term sustainable development, including contributions to the broader community. Similarly, the ESG Disclosure Simplification Act passed in the U.S. [2] in 2021 mandates public companies to disclose ESG-related matters in their annual filings with the SEC [3]. In 2022, the China Securities Regulatory Commission (CSRC) issued the Guidelines on Investor Relationship Management for Listed Companies, listing ESG as a key component of investor communication and requiring firms to explain their ESG activities. These policies play a crucial role in guiding companies in their ESG strategy implementation while also drawing increasing attention from stakeholders. As a result, more investors are considering a company’s ESG strategy as an important criterion for evaluating its long-term value and making investment decisions.

However, despite the widespread recognition of ESG’s importance, it continues to face criticism both in research and practice. Some scholars have questioned the rationality of ESG practices, suggesting they deviate from the original purpose of business by potentially violating the fundamental principle of fiduciary duty [4]. Moreover, they may impair the company’s ability to create value. Some critics have argued that due to external pressures, many companies tend to adopt performative ESG measures rather than authentic ESG goals, resulting in ESG practices undermining the value-creating effects of the organization [5]. This phenomenon occurs for three key reasons: First, government and regulatory ESG policies often push companies to meet minimum standards to avoid penalties rather than fully incorporating ESG into their business practices [6]. Second, external stakeholders, such as the public and NGOs, exert pressure on companies to demonstrate commitment to sustainable development. However, this norm-driven pressure can result in superficial efforts to maintain good relations with stakeholders rather than promoting genuine ESG transformation [7]. Third, in highly competitive markets, companies may adopt performative ESG practices by mimicking the behaviors of successful competitors to gain a competitive advantage. These pressures create challenges for companies to balance authentic ESG integration with responding to external demands, often preventing them from fully realizing the intended benefits of their ESG strategies [8].

Despite the growing interest in ESG, the influence of institutional pressures on corporate ESG performance remains underexplored, especially in developing economies like China. To address this theoretical gap, the present study investigated how institutional pressures shape corporate sustainability strategies and decisions, particularly in the context of ESG disclosure

This study constructed a new theoretical framework to explore the impact of institutional pressures on corporate ESG strategy implementation. It examined how external institutional pressures—coercive, mimetic, and normative—affect internal corporate decision-making processes and ESG responsibility fulfilment. This research focused on A-share listed companies from 2009 to 2023 and delved into the boundary conditions of institutional pressures on corporate ESG actions. Since institutional pressures are external while corporate ESG actions represent internal responses, this study analyzed how these pressures are internalized through strategic decision-making. Additionally, it investigates whether strategic decision making in response to institutional pressures influences economic efficiency, revealing potential conflicts or paradoxes between institutional demands and efficiency goals. By filling gaps in the existing research, this study offers a fresh perspective on understanding corporate ESG responsibility fulfilment. The main contributions of this paper are threefold: (1) it uncovers the differentiated effects of various institutional pressures on corporate ESG responsibility fulfilment, thereby expanding the literature on corporate motives through institutional theory; (2) it sheds light on the inconsistent outcomes faced by governments and regulatory agencies in promoting ESG responsibilities under institutional pressures; (3) it provides a new analytical framework for understanding the drivers behind corporate ESG actions and their real-world impacts.

This paper is structured as follows: Section 2 reviews the relevant literature and outlines the research hypothesis. Section 3 details the research model, including the variables and methodology. Section 4 presents the empirical analysis, while Section 5 discusses the results.

2. Literature Review and Research Hypothesis

(1)

Institutional pressure and ESG performance

Institutional theory explains how shared systems containing rules, norms, beliefs, and traditions exist within the organizational field, distinguishing that field from others. Institutional theory suggests that organizations operating in the field face isomorphic pressures, i.e., firms are incentivized to comply with institutional pressures and penalized for non-compliance [9]. Thus, institutional norms create behavioral consistency. Pache and Santos (2013) argued that while firms are subject to institutional pressures under specific institutional domains, firms’ performance is not homogeneous, and certain firms are more likely to succumb to pressures [10]. For example, publicly traded firms may feel more pressure to pursue decisions that align with stakeholder requirements due to their higher visibility. Based on this premise, Ortas et al. argued that corporate engagement in environmental, social, and governance (ESG) activities and their effectiveness are strongly influenced by the institutional environment in which they operate [11]. Institutional frameworks and norms shape corporate behavior and influence the availability and demand for key resources, affecting corporate sustainability and social responsibility performance [12,13]. This means that corporate investment and effectiveness in ESG actions are not only dependent on internal strategies and resources but are also driven by external institutional pressures [7,14].

(2)

Mandatory institutional pressure (regulatory pressure) and ESG performance

Coercive pressure comes from the formal and informal pressure an organization exerts on other organizations on which it depends, for example, an effective regulatory system [15]. This pressure manifests itself primarily in the constraints on, regulation of, and moderation of business behavior. Coercive isomorphic institutional pressure arises when more powerful organizations, such as governments, force enterprises to act differently. In the field of social responsibility, coercive isomorphic pressures come mainly from the regulations enacted by the government. These regulations impose incentives and disincentives on firms in areas such as environmental protection, employment, and corporate governance. Government-imposed regulations are key in pushing companies to fulfil their ESG responsibilities [16]. Meng et al. (2022) found that government regulatory requirements affect firms’ environmental disclosure behavior [17]. In addition to government, laws, the regulations and policies developed by sectors such as professional organizations and trade associations are also important sources of coercive pressure [18]. Businesses are more inclined to fulfil their social responsibilities under the pressure of mandatory isomorphic regimes [19]. This is not only to demonstrate its legitimacy to the regulator positively but also to demonstrate its compliance and social responsibility, thus maintaining its legitimacy and good reputation in a complex regulatory environment. Thus, if a firm is subject to mandatory regulatory pressure, it tends to impact its environmental performance positively [20]. Therefore, this paper proposes Hypothesis H1:

Hypothesis 1.

Mandatory institutional pressure (regulatory pressure) positively impacts listed companies’ fulfillment of ESG activities.

(3)

Imitation institutional pressure (imitation pressure) and ESG performance

Under uncertainty, companies often respond to peer pressure by emulating others’ ethical behavior and responsible business practices [15]. Imitative isomorphic pressure arises from the imitative learning behaviors of firms in response to competition within their industries. On the one hand, imitative isomorphic institutional pressures typically arise from the global diffusion of industry norms, industry guidelines, and responsible corporate practices [21]. Firms may imitate or try to imitate the practices of other organizations that are perceived to be more successful. Thus, organizational decisions are based on self-interest and observations of competitors’ strategic decisions. On the other hand, imitative isomorphic institutional pressures can be influenced by the industry in which the firm operates. Shabana et al. (2017) argued that firms may seek legitimization by emulating the practices of perceived CSR leaders and that, when CSR reporting by public companies becomes the norm, firms are under pressure to do so, whether or not it is directly related to their operations or needs [22]. This pressure is particularly pronounced when firms are more visible to the public. Ng et al. found that when firms are pressured by their peers and competitors, they become more actively engaged in similar imitative practices, especially in sustainability. This pressure drives firms not only to mimic the behavior of their competitors but also to commit themselves more deeply to promoting environmentally friendly strategies, which can have a significant positive impact on the future sustainability of a firm. This positive impact also has a strong positive predictive effect on CSR practices [23].

The literature further confirms that competitive industry dynamics and copycat pressures can significantly drive corporate sustainability and social responsibility efforts [24,25]. Martínez and García noted that industry-specific effects may influence firms’ decision-making processes. Based on institutional theory, firms may seek legitimization by mimicking the strategies of their peers, thus ensuring that their strategies align with industry norms and societal expectations, which in turn drives firms to build sustainable strategies [26]. Considering the influence of multiple factors, such as competitors and industry requirements, imitative behavior helps companies make strategic decisions with minimal cost in highly uncertain and ambiguous situations by learning from the practices of successful companies. After realizing that companies or competitors in the industry actively fulfill their ESG responsibilities, companies are more likely to succumb to imitative pressure and consciously invest in ESG practices. Therefore, this study proposes the following Hypothesis H2:

Hypothesis 2.

Imitative institutional pressure (imitative pressure) positively impacts the ESG performance of listed companies.

(4)

Normative institutional pressure (normative pressure) and ESG performance

According to DiMaggio and Powell (1983), normative homomorphic pressures arise from the diffusion of norms, value assumptions, and beliefs about business behavior, primarily due to global specialization [15]. In the process of specialization, companies develop their own unique corporate culture, norms, and values due to their different backgrounds and follow these standards [26]. Thus, normative homoplastic pressure arises when firms adopt norms developed through specialization in a particular field. Normative homoplastic pressures are usually informal, expressed through shared values and norms, and construct organizational legitimacy by directing members to be accountable to stakeholders [27]. The normative isomorphic pressures on firms in developing countries come mainly from standardized norms developed within the industry [28].

The literature establishes that the public may exert normative pressure on firms through positive environmental actions or filing citizen lawsuits, thus influencing the environmental disclosure of listed companies, which in turn affects environmental, social, and corporate governance performance [29]. Marquis et al. (2007) show that business involvement in social issues depends in part on its identification with social norms, its perception of needs, and its embeddedness with social actors [30]. Over time, when locally dominant norms become the standard, businesses are encouraged to follow them. Yin (2017) argued that the more a firm values social norms and values, the more likely it is to act in a socially responsible manner and the better it can fulfil its social responsibilities [31]. However, in China’s institutional environment, the role of normative pressure may be more complex and may not always promote the improvement in ESG performance. First, compared with Western developed countries, Chinese non-governmental organizations and social groups may face more challenges in exerting normative pressure. Due to the strict government supervision of social organizations, many normative pressures are regarded by enterprises as opponents rather than partners, resulting in symbolic or superficial ESG practices (performative compliance) by enterprises, that is, only formal ESG disclosure to meet social expectations rather than truly improving sustainable development performance [30]. Second, under the authoritarian system, enterprises rely more on government guidance rather than industry self-discipline or social pressure to formulate ESG strategies, and the actual impact of normative pressure may be weaker than or even the opposite to the traditional theoretical predictions. In addition, some research suggests that Chinese companies, when faced with external normative pressures, adopt a “selective adaptation” strategy, i.e., adopting only those ESG norms that are in their self-interest and ignoring those that may affect short-term profitability [32]. This is particularly evident in polluting industries and resource-intensive firms, some of which passively adjust their ESG behaviors only when regulatory requirements or market pressures intensify rather than proactively responding to calls for social responsibility [33]. In addition, institutional and stakeholder theories interact with each other in explaining firms’ ESG motivations. Institutional theory emphasizes that firm behavior is constrained by the institutional environment, while stakeholder theory focuses on how firms respond to the demands of different stakeholders. In the context of normative pressures, governments, industry associations, and social organizations may convey different or even conflicting ESG expectations to firms, leading them to adopt strategic compliance or symbolic compliance.

Therefore, although normative pressure should theoretically promote firms’ ESG performance, its role may be challenged and may even have a negative impact under China’s specific institutional environment. Based on the above analysis, we propose the following Hypothesis H3:

Hypothesis 3.

Normative pressure positively affects the ESG performance of listed companies, and, in industries with weak government regulation, normative pressure may lead to peripheral compliance, which weakens its positive impact on ESG performance.

3. Research Methods and Data

3.1. Sample Selection and Data Sources

This study took A-share companies listed on China’s Shanghai and Shenzhen stock markets as the primary research objects. The sample covered a total of 14 years of data from 2009 to 2023, and the following data processing was carried out: (1) financial listed companies were excluded; (2) the data of ST and *ST companies were excluded; (3) the data were adjusted upward and downward by 1%. Ultimately, 2943 eligible companies were obtained, with a total of 32,797 observations. The financial data of the listed companies were from the Wind Financial Terminal, the Guotai An CSMAR database, and the CNRDS database.

3.2. Variable Setting

(1)

ESG performance (ESG_score)

The total Shanghai Huazheng Enterprise ESG Rating score is an ESG rating data provided by a third-party rating agency in China as an objective indicator measuring the fulfillment of corporate ESG responsibilities. The rating system is highly professional and authoritative, so this study used the Shanghai Huazheng ESG Rating as the measure of ESG performance [34,35].

(2)

Mandatory institutional pressures (Reg)

Coercive isomorphic institutional pressure comes from the formal or informal pressure exerted by other organizations on which the organization depends, including the regulatory system constraints imposed on the organization during its operations [15]. In the ESG regulatory context, government policies, industry guidelines, and mandatory disclosure requirements are the key coercive forces that shape firms’ behavior. Based on previous studies in the literature, this study measured coercive institutional pressure by assigning a value of 1 if the firm belonged to a heavy-polluting industry or a state-owned enterprise, and 0 otherwise [36].

(3)

Imitative institutional pressure (Imi)

Imitative isomorphic institutional pressure usually refers to the convergent behavior of enterprises due to the global spread of industry norms, industry standards, and corporate social responsibility practices [21]. In a highly competitive market environment, enterprises often imitate or try to copy the practices of peers or industry leaders that are considered more successful in order to enhance their own adaptability and improve their competitive advantage. This study used the industry average of the total ESG rating score of Shanghai Huazheng Enterprises (according to the industry classification standard of the China Securities Regulatory Commission, the manufacturing industry have a 2-digit code, and the other industries have a 1-digit code) to measure imitative institutional pressure [36].

(4)

Normative institutional pressure (lnNGOs)

Normative institutional pressure mainly stems from the widespread dissemination of norms, values, assumptions, and beliefs related to business behavior, often as a result of global professional development [15]. This study combined previous studies’ methods to measure normative institutional pressure by the number of environmental NGOs registered at the end of the year in the province (city) where the enterprise was located [36]. This indicator reflects the extent to which the enterprise operates in an environment with higher normative expectations for ESG performance.

(5)

Control variables

The control variables in this paper included enterprise size (Size), the shareholding ratio of the largest shareholder (Top1), enterprise age (lnage), enterprise growth (Growth), operating cash flow (Cf), and enterprise profitability (ROA). See

Table 1. Research model.

Variable	Symbol	Definition
Explained variable	ESG performance (ESG_score)	Shanghai Huazheng Enterprise ESG Rating total score
Explanatory variable	Mandatory institutional pressures (Reg)	Value of 1 if the company belongs to a heavily-polluting industry or is state-owned; otherwise, value of 0
	Imitative institutional pressure (Imi)	Shanghai Huazheng Enterprise ESG Rating total score industry average (according to the industry classification standard of the China Securities Regulatory Commission, the manufacturing industry has a 2-digit code, and other industries have a 1-digit code)
	Normative institutional pressure (lnNGOs)	Number of environmental NGOs in the province (municipality) where the company is registered at the end of the year
Control variable	Enterprise size (Size)	The natural logarithm of the total assets at the end of the period
	Equity concentration (Top1)	The shareholding ratio of the largest shareholder
	Enterprise growth (Growth)	Growth rate of primary business income
	Enterprise age (lnage)	The logarithm of the age of the enterprise
	Operating cash flow (Cf)	Net cash flow from operating activities/total assets at the beginning of the period
	Enterprise return on total assets (Roa)	Net profit/average total assets

for the definitions of all variables. These control variables were selected based on their possible impact on the ESG performance of enterprises. For example, enterprise size is usually related to the availability and influence of resources, which may affect the ESG performance of enterprises, while financial variables such as operating cash flow and enterprise profitability directly reflect the economic health of enterprises and may have an impact on the implementation of ESG strategies.

3.3. Research Model

To reduce endogeneity and missing variable situations, this study used a fixed-effect model to control for individual and time-specific effects, construct models, and test hypotheses. ${\gamma }_i$ and ${\mu }_t$ are the fixed industry and year effects, respectively.

In order to test the impact of institutional pressure on the fulfillment of ESG responsibilities, we established models (1–4):

$${ESG\_score}_{i,t}={\beta }_0+{\beta }_1{Reg}_{i,t}+{\beta }_2{Controls}_{i,t}+{\gamma }_i+{\mu }_t+{\epsilon }_{i,t}$$

(1)

$${ESG\_score}_{i,t}={\beta }_0+{\beta }_1{Imi}_{i,t}+{\beta }_2{Controls}_{i,t}+{\gamma }_i+{\mu }_t+{\epsilon }_{i,t}$$

(2)

$${ESG\_score}_{i,t}={\beta }_0+{\beta }_1{lnNGOs}_{i,t}+{\beta }_2{Controls}_{i,t}+{\gamma }_i+{\mu }_t+{\epsilon }_{i,t}$$

(3)

$${ESG\_score}_{i,t}={\beta }_0+{\beta }_1{Reg}_{i,t}+{\beta }_2{Imi}_{i,t}+{\beta }_3{lnNGOs}_{i,t}+{\beta }_4{Controls}_{i,t}+{\gamma }_i+{\mu }_t+{\epsilon }_{i,t}$$

(4)

In this article, $Reg$, $Imi$, and $lnNGOs$ are the explanatory variables (independent variable)s, while $ESG\_score$ is the variable to be elucidated (dependent variable). $\sum Control$ signifies the control variable, u_t indicates the temporal fixed effects, $u_t$ represents the individual fixed effects, and ${\mu }_i$ is the stochastic disturbance term. By introducing fixed effects for individuals and time, the model can control the influence of individual and time characteristics on the dependent variable, thereby reducing the bias of omitted variables and improving the estimate’s accuracy.

4. Empirical Analysis

4.1. Descriptive Statistical Analysis

As shown in

Table 2. Descriptive statistical analysis.

Variable	N	Mean	SD	Min	Max
ESG_score	32,797	4.117	0.935	1.500	6
Reg	32,797	0.592	0.491	0	1
Imi	32,797	4.125	0.309	1	5.750
lnNGOs	30,358	4.965	1.163	1.792	7.089
Size	32,797	22.41	1.326	19.88	26.26
lnage	32,797	2.939	0.346	1.792	3.555
Top1	32,797	35.42	15.19	8.420	74.45
Growth	32,797	0.353	0.994	−0.703	6.740
Cf	32,797	0.0490	0.0700	−0.163	0.245
Roa	32,797	0.0510	0.0630	−0.236	0.231

, the mean value of the enterprise ESG score was 4.117, and the median was 4. The enterprise ESG scores were normally distributed and did not show bias. The minimum value was 1.5, and the maximum value was 6, indicating differences in the ESG scores of different enterprises. The mean value of the independent variable—mandatory institutional pressure (Reg)—was 0.592, indicating that the proportion of heavily-polluting and state-owned enterprises in China was relatively high. Normative institutional pressure used the logarithm of the number of NGOs in the province (or municipality) where the company was registered at the end of the year (lnNGOs), and the distribution varied greatly among the different provinces.

4.2. Correlation Analysis

Studies indicate that a correlation coefficient above 0.7 suggests potential multicollinearity [37]. As seen from

Table 3. Correlation analysis. Robust t-statistics in parentheses: *** p < 0.01, ** p < 0.05.

	ESG_Score	Reg	Imi	lnNGOs	Size	lnage	Top1	Growth	Cf	Roa
ESG_Score	1
Reg	0.029 ***	1
Imi	0.317 ***	−0.063 ***	1
lnNGOs	0.015 ***	−0.065 ***	0.036 ***	1
Size	0.258 ***	0.209 ***	0.070 ***	0.176 ***	1
lnage	−0.046 ***	0.070 ***	0.089 ***	0.242 ***	0.171 ***	1
Top1	0.114 ***	0.150 ***	0.016 ***	−0.00300	0.185 ***	−0.160 ***	1
Growth	−0.00100	−0.015 ***	0.121 ***	0.015 ***	0.014 **	0.037 ***	0.019 ***	1
Cf	0.098 ***	0.028 ***	−0.023 ***	0.00400	0.064 ***	−0.00600	0.091 ***	−0.104 ***	1
Roa	0.203 ***	−0.00200	−0.00100	−0.064 ***	0.053 ***	−0.116 ***	0.146 ***	−0.022 ***	0.424 ***	1

, although most of the variables in this study were significantly correlated, all correlations were below 0.7, indicating no problem with multiple collinearity. Overall, the independent variable ESG_score and the three dependent variables studied in this paper were significantly correlated. However, the precise relationship was verified by adding control variables and using a two-way fixed-effect model in the following text.

4.3. Testing of Hypotheses

To assess the impact of institutional pressures on corporate ESG responsibility, this study employed multiple linear regression, with the results presented in

Table 4. Results of the benchmark regression.

	(1)	(2)	(3)	(4)
VARIABLES	ESG_Score	ESG_Score	ESG_Score	ESG_Score
Reg	0.0909 ***			0.1054 ***
	(3.20)			(3.58)
Imi		0.9108 ***		0.9041 ***
		(33.77)		(32.40)
lnNGOs			−0.0190 *	−0.0204 *
			(−1.65)	(−1.79)
Size	0.1906 ***	0.1953 ***	0.1946 ***	0.1871 ***
	(20.77)	(21.86)	(20.74)	(19.58)
lnage	−0.2868 ***	−0.2648 ***	−0.2758 ***	−0.2935 ***
	(−7.87)	(−7.43)	(−7.40)	(−7.87)
Top1	0.0026 ***	0.0030 ***	0.0030 ***	0.0027 ***
	(3.68)	(4.27)	(4.04)	(3.60)
Growth	−0.0402 ***	−0.0385 ***	−0.0412 ***	−0.0412 ***
	(−5.22)	(−4.93)	(−5.20)	(−5.18)
Cf	0.2132 **	0.1897 *	0.1853 *	0.1682 *
	(2.11)	(1.92)	(1.77)	(1.65)
Roa	2.6264 ***	2.5380 ***	2.6033 ***	2.6059 ***
	(20.45)	(19.97)	(19.50)	(19.75)
Constant	0.4119 *	−3.4695 ***	0.4192 *	−3.1228 ***
	(1.85)	(−14.43)	(1.82)	(−12.14)
Observations	32,797	32,797	30,358	30,358
R-squared	0.183	0.218	0.181	0.215
Ind FE	YES	YES	YES	YES
YEAR FE	YES	YES	YES	YES

Robust t-statistics in parentheses: *** p < 0.01, ** p < 0.05, * p < 0.1.

. As shown in columns (1) to (3), the regression coefficient for coercive institutional pressure (Reg) was significantly positive at the 1% level, supporting Hypothesis 1. The coefficient for mimetic institutional pressure (Imi) was also significantly positive at the 1% level, confirming Hypothesis 2. However, the coefficient for normative institutional pressure (lnNGOs) was significantly negative at the 10% level, rejecting Hypothesis 3. Column (4) presents the regression results when all three institutional pressures were considered simultaneously, showing no significant difference from the previous findings. These results indicate that different institutional pressures affect listed companies’ fulfilment of their ESG responsibilities.

4.4. Heterogeneity Test

This study examined the effects of institutional pressures by grouping companies based on median ESG scores. According to

Table 5. Heterogeneity test.

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	ESG_Score	ESG_Score	ESG_Score	ESG_Score	ESG_Score	ESG_Score
Reg	0.0126	0.0560 **
	(0.70)	(2.56)
Imi			0.3105 ***	0.4329 ***
			(12.23)	(15.58)
lnNGOs					−0.0064	−0.0223 ***
					(−0.82)	(−3.15)
Size	0.0901 ***	0.0571 ***	0.0924 ***	0.0628 ***		0.0887 ***
	(15.01)	(7.32)	(15.61)	(8.14)		(14.48)
lnage	−0.0393 *	−0.1836 ***	−0.0368 *	−0.1749 ***		−0.0336
	(−1.83)	(−6.42)	(−1.73)	(−6.23)		(−1.55)
Top1	0.0003	0.0023 ***	0.0004	0.0025 ***		0.0005
	(0.62)	(4.33)	(0.96)	(4.74)		(1.16)
Growth	−0.0075	−0.0263 ***	−0.0066	−0.0265 ***		−0.0077
	(−1.35)	(−3.89)	(−1.17)	(−3.89)		(−1.36)
Cf	0.0249	0.0613	0.0367	0.0312		0.0102
	(0.31)	(0.71)	(0.46)	(0.36)		(0.12)
Roa	0.9005 ***	1.4861 ***	0.8882 ***	1.4748 ***		0.8714 ***
	(8.30)	(14.54)	(8.24)	(14.50)		(7.85)
Constant	2.9229 ***	2.5685 ***	1.5559 ***	0.6894 ***	4.9548 ***	3.0472 ***
	(20.00)	(14.25)	(8.69)	(3.20)	(128.50)	(20.19)
Observations	14,712	18,085	14,712	18,085	13,710	13,710
R-squared	0.151	0.139	0.163	0.155	0.102	0.154
Ind FE	YES	YES	YES	YES	YES	YES
YEAR FE	YES	YES	YES	YES	YES	YES

Robust standard errors in parentheses: *** p < 0.01, ** p < 0.05, * p < 0.1.

, Columns (1), (3), and (5) represent the high ESG score group, while columns (2), (4), and (6) represent the low ESG score group. The results show that coercive and normative institutional pressures significantly impacted only the low ESG score group, with no notable difference in the effects of mimetic pressure between the two groups. Mandatory institutional pressure usually comes from the mandatory requirements of laws and regulations or the constraints of external supervision. In the low ESG score group, the impact of mandatory pressure on enterprises was significant, indicating that these enterprises were more inclined to be forced to take actions to improve ESG performance under external mandatory requirements. In contrast, enterprises in the high ESG score group may have already complied with these requirements relatively well, so the impact of mandatory pressure on them was not significant. This pressure comes from industry standards, professional ethics, or social expectations. The results show that normative pressure also significantly impacted the companies in the low ESG score group, indicating that these companies felt greater pressure to improve their ESG performance under the requirements of social norms and industry standards. Companies in the high ESG score group may have already surpassed the basic industry or social standards, so the impact of this type of pressure on them was relatively small.

4.5. Robustness Tests

This study applied lagged-period robustness tests to examine the long-term effects of different institutional pressures on corporate ESG performance, with the results presented in

Table 6. Robustness tests.

	(1)	(2)	(3)
VARIABLES	ESG_Score	ESG_Score	ESG_Score
L.Reg	0.1274 ***
	(4.40)
L.Imi	0.5948 ***
	(22.20)
L.lnNGOs	−0.0162
	(−1.42)
L2.Reg		0.1521 ***
		(5.08)
L2.Imi		0.1753 ***
		(5.37)
L2.lnNGOs		−0.0123
		(−1.02)
L3.Reg			0.1716 ***
			(5.52)
L3.Imi			−0.1061 ***
			(−2.71)
L3.lnNGOs			−0.0071
			(−0.55)
Size	0.2026 ***	0.2167 ***	0.2301 ***
	(21.32)	(21.95)	(22.30)
lnage	−0.2563 ***	−0.2442 ***	−0.2377 ***
	(−6.39)	(−5.53)	(−4.90)
Top1	0.0023 ***	0.0019 **	0.0020 **
	(3.08)	(2.42)	(2.27)
Growth	−0.0401 ***	−0.0422 ***	−0.0422 ***
	(−4.97)	(−4.91)	(−4.72)
Cf	0.2828 ***	0.3924 ***	0.4224 ***
	(2.61)	(3.31)	(3.33)
Roa	2.4320 ***	2.3776 ***	2.2922 ***
	(17.89)	(16.64)	(15.41)
Constant	−2.3155 ***	−0.9754 ***	−0.1920
	(−9.01)	(−3.44)	(−0.61)
Observations	28,938	25,920	23,122
R-squared	0.206	0.199	0.207
Ind FE	YES	YES	YES
YEAR FE	YES	YES	YES

Robust standard errors in parentheses: *** p < 0.01, ** p < 0.05.

[38,39]. The findings show that coercive institutional pressure remained significant across 1–3 lagged periods, with its effect strengthening over time. Mimetic pressure was significantly positive in the first and second lags, but its impact diminished, becoming negatively correlated by the third lag. Normative pressure was insignificant across multiple lags, suggesting that coercive pressure was the primary driver of sustained improvements in corporate ESG performance.

5. Conclusions

5.1. Summary

This study investigated the motivations behind the fulfilment of ESG responsibilities among listed companies in China through the lens of institutional pressures. The findings reveal that coercive and mimetic pressures significantly encourage companies to adopt and fulfil ESG responsibilities, while normative pressure shows a negative impact. This research extended the application of institutional theory to corporate social responsibility (CSR) and ESG, emphasizing the substantial role of the institutional environment in shaping corporate strategies, legitimacy, market competitiveness, and long-term sustainable development. By enhancing policies, promoting industry best practices, and raising social responsibility awareness, ESG fulfilment and sustainable development can be further advanced, offering practical insights for policymakers and business leaders.

5.2. Theoretical Implications

This study broadens the application of institutional theory by examining its role in corporate ESG behavior, particularly under the influence of coercive, mimetic, and normative pressures. This research provides new theoretical insights into how firms adjust their sustainability strategies in response to external institutional pressures, extending the understanding of CSR and ESG in emerging economies. Specifically, this study challenges previous assumptions that normative pressures solely have a positive impact on corporate ESG actions. The negative influence of normative pressure observed here calls for a re-evaluation of the current theoretical frameworks, particularly in how they address the complex interaction between social expectations and corporate behavior. Furthermore, this research fills a significant gap in the literature by exploring ESG behavior in a developing country like China, providing new perspectives for future studies in these contexts.

5.3. Practical Implications

This study emphasizes the critical role of institutional pressures in shaping corporate ESG strategies, urging companies to recognize and proactively address these pressures. By effectively navigating external challenges, firms can not only meet government and market expectations but also strengthen their legitimacy and social reputation, leading to enhanced competitiveness and market position. The practical implications for policymakers are also significant. Governments and regulatory agencies can use mandatory regulations as a tool to amplify corporate commitment to ESG practices, creating internal cognitive pressure that encourages firms to view ESG practices as a competitive advantage rather than a mere compliance requirement. This approach supports the promotion of sustainable business practices, which in turn fosters a virtuous cycle across the market. This study offers a fresh perspective for advancing corporate ESG responsibility through policy frameworks that encourage deeper integration of ESG strategies, ultimately reinforcing the implementation of corporate social responsibility on a broader scale.

5.4. Limitations and Future Research

Although this study provides new insights into the relationship between ESG and institutional pressures, it also has certain limitations. First, the sample is mainly based on listed companies in China, so its generalizability is limited and cannot be generalized to other regions or economic environments. Future research could benefit from cross-country or cross-regional comparisons to explore differences in corporate ESG behavior in different institutional environments. Second, the research subjects in this study were listed companies, which was insufficient for studying the differentiated impact of institutional pressures on different types of companies (such as small or non-listed companies). Future research should focus on small- and medium-sized enterprises and non-listed companies to examine how they respond to institutional pressures.