Governance Outweighs Environmental and Social Performance in Driving Sustainable Industrial Park Performance during China’s ESG Transition
DOI:
https://doi.org/10.59088/dtgr5957Keywords:
ESG performance, governance, industrial parks, sustainability performance, government support, Stakeholder Theory, ; Institutional Theory, Resource-Based View, PLS-SEMAbstract
China's transition toward carbon neutrality has positioned Environmental, Social, and Governance (ESG) performance as a cornerstone of sustainable industrial development. Industrial parks, which serve as the primary engines of China's manufacturing economy, face increasing pressure to integrate ESG principles into their operations. Yet limited empirical evidence identifies which ESG dimension contributes most to sustainability performance within these complex industrial ecosystems. Drawing on Stakeholder Theory, Institutional Theory, and the Resource-Based View, this study develops and tests a theoretical framework that positions governance as the dominant ESG capability driving sustainable industrial park performance. Using a sequential explanatory mixed-methods design, survey data from 200 ESG stakeholders across industrial parks in Shandong Province were analyzed through partial least squares structural equation modeling (PLS-SEM), complemented by 20 semi-structured interviews. The results reveal that all three ESG dimensions significantly influence sustainability performance, with governance exerting the strongest effect (β = 0.338, p < 0.001), followed by environmental performance (β = 0.246, p < 0.001) and social performance (β = 0.192, p < 0.001). Government support positively moderates the ESG–sustainability relationship (β = 0.163, p = 0.002), indicating that institutional facilitation amplifies the effectiveness of ESG implementation. The integrated framework explains 68.3% of the variance in sustainability performance. These findings extend ESG research from firm-level analysis to industrial park ecosystems and identify governance as a strategic organizational capability rather than merely a compliance mechanism. The study offers actionable insights for policymakers strengthening ESG governance frameworks and park managers seeking to prioritize institutional capacity building in pursuit of China’s Dual Carbon objectives.
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Copyright (c) 2026 Liu Qi, Tarekol Islam Maruf
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