Open innovation, enterprise value and the mediating effect of ESG

Purpose: This paper aims to investigate the impact of open innovation (OI) in Chinese enterprises on enterprise value (EV). At the same time, this research explores the effects of OI in environmental, social and governance (ESG) and also reveals the intermediary role of ESG in the impact of OI on improving EV. Design/methodology/approach: This study builds a theoretical framework to define a set of hypotheses verified in empirical research. Based on the panel data of Chinese listed companies removing missing data from 2011 to 2020, a two-way fixed effect model is used to study the relationship between OI, ESG and EV. Findings: The research shows that OI of enterprises has effectively improved their value. At the same time, OI can also improve the ESG of enterprises. That OI increases EV is partly by the mediating path of ESG. Originality/value: This study determines the influence of OI on EV from a stakeholder and sustainable development perspective, clarifying the mediating pathway of ESG in the relationship. Doing so could inspire companies to improve their OI and desire to enhance competitiveness. It will also prompt enterprises to pay attention to social responsibility activities.