Is ESG improvement an efficient green solution for resource curse vulnerability of enterprise management? Evidence from fossil fuels extraction industry

The resource curse phenomenon poses serious challenges for many economies globally. This study examines the impact of Environmental, Social, and Governance (ESG) investments on the Resource Curse Vulnerability Index for 40 Chinese fossil fuel enterprises listed on the Shanghai Stock Exchange from 2016 to 2020. Using an autoregressive distributed lag approach, results show that ESG investments reduce vulnerability, with a 1% increase leading to a 0.43% decrease in the short term and 0.69% in the long term. However, higher total liabilities and increased Research and Development (R&D) expenditures exacerbate vulnerability. These findings suggest that financial strain and management complexity heighten resource curse risks. Policies promoting robust ESG standards, transparent reporting, and stricter anti-greenwashing regulations are crucial for sustainable enterprise management.