For a long time, economists have launched a series of theoretical and empirical investigations on the “gospel theory” and “curse theory” of natural resource endowment. The “gospel theory” advocates that abundant natural resources are an important factor for economic growth, which is conducive to the rapid development of regional economy and the rapid accumulation of capital. According to the theory of new economic geography, the development of resource industries will attract the agglomeration of their upstream and downstream industries. The spatial agglomeration of industries saves transaction costs and helps to generate economies of scale, thereby promoting economic growth. Feyrer et al. (2017) used US data and found that resource extraction has a positive spillover effect on related industries. The benefits brought by the mining industry to the local area are higher than the mining costs. Resources are not a curse, but a blessing. Allcott and Keniston (2018) used micro data on the US manufacturing industry from 1969 to 2014 and found that resource prosperity contributes to the development of related manufacturing enterprises, while having no significant impact on non-related manufacturing enterprises. Asher and Novosad (2014) used data from India’s three economic censuses and instrumental variable method to study and found that the economic growth effect brought about by resource prosperity is extensive, with a positive spillover effect on surrounding towns 50km away from mines. The “curse theory” believes that regions with abundant resources will cause serious negative effects on long-term economic growth through intermediary crowding out effects (Gylfason, 2001), institutional deterioration effects (Bodea et al., 2016) and price fluctuation effects (Leong and Mohaddes, 2011; Su et al., 2023), which are not conducive to the sustainable development of local enterprises. On the other hand, the over-exploitation of natural resources will bring a series of environmental problems such as ecological environment damage and natural environment deterioration, and the efficiency of environmental pollution management varies greatly among regions (Zhao et al., 2022). Therefore, as the main body of pollution discharge and treatment, enterprises face many challenges in their development (Lin et al., 2021; Qin et al., 2022; Su et al., 2022a). In 2020, China has proposed the social and economic development goal of carbon peaking and carbon neutrality. In this context, higher demands are placed on corporate sustainability (Su et al., 2022b; Su et al., 2022c). Investors also incorporate the performance of enterprises in environmental and social aspects into their investment decision-making functions. Enterprise ESG index is the concrete embodiment of this emerging investment concept.

Enterprise ESG indicators are obtained by combining the performance of enterprises in three aspects: environmental, social and governance. In recent years, companies have shifted from the short-term goal of profit maximization to the long-term goal of sustainable ESG performance (Min and Mentzer, 2004; Studer et al., 2006). Stakeholder theory suggests that ESG emphasizes the coordinated development of economy, environment, and society, advocates long-term goal orientation, promotes the pursuit of maximizing social value by enterprises, and helps to build trust in uncertain environments; At the same time, enterprises actively practice the concept of sustainability, increase corresponding investments, and form ESG advantages, which have a strong externality on their own business development. ESG performance of enterprises has been a hot topic studied by many scholars in the past decade (Halbritter and Dorfleitner, 2015; Van Duuren et al., 2016; Gillan et al., 2021; Pedersen et al., 2021). The current empirical research on corporate ESG mainly focuses on two aspects: the economic impact of corporate ESG and the various factors that affect corporate ESG performance. Several studies showed that ESG has become an important source of corporate risk that can directly or indirectly affect a company’s financial performance as well as profitability (Friede et al., 2015; Aouadi and Marsat, 2018; Byun and Oh, 2018; Broadstock et al., 2021; Wong et al., 2021). For example, research by Cheng et al., (2014) and Ghoul et al. (2017) found that companies that focus on environmental, social and governance development are more likely to obtain financial resources needed for operating activities at a lower cost. In terms of factors influencing corporate ESG performance, some researchers have studied from the perspectives of socio-cultural and legal systems (Alsayegh et al., 2020; Chen et al., 2022) and internal corporate management factors (Cucari et al., 2018; McBrayer, 2018). The former includes factors such as the level of economic development (Cai et al., 2016), market liberalization (Chemmanur et al., 2020; Yang et al., 2022), social and media attention (Garcia et al., 2017; Burke, 2022), and the legal system (Liang and Renneboog, 2017). The latter includes factors as the board and CEO (Cronqvist and Yu, 2017; Hegde and Mishra, 2019), institutional investors (Dyck et al., 2019; Chen et al., 2020), and management tenure (McBrayer, 2018). For example, Doran and Ryan (2016) found that regulation and customer pressure are feasible mechanisms to encourage enterprises to fulfill social and environmental responsibilities, thus improving their ESG performance. This paper attempts to empirically study the relationship between resource dependence and corporate ESG performance from the perspective of the company’s external environment, that is, the resource dependence of the region where the company is located.

There is a large branch of literature revolving around the relationship between resource endowments and economic growth. Among them, the findings of Sachs and Warner, (1995) are the most representative. They selected the country-level variables of natural resources and economic growth, and studied the relationship between the two variables, finding that natural resources and economic growth were surprisingly negatively correlated, which overturned the traditional perceptions. Subsequently, Gylfason (2001); Papyrakis and Gerlagh, (2004) also found a monotonic negative relationship between resource stocks and economic growth in the long run for countries that use natural resources solely for economic development. There are also scholars who take a different view. For example, Boschini and Roine, (2007), Same (2008), and Haseeb et al. (2021) argue that natural resources are not the direct cause of the conundrum of economic growth problems in resource-based regions. A few studies have explored this issue from the perspective of corporate behavior. Torvik (2001) argues that in resource-rich countries, firms tend to engage in unproductive economic activities and benefit through rent-seeking, which is detrimental to economic growth. Lim and Morris (2022) found that state-owned enterprises can achieve higher-scale economies through production links with natural resources departments. In general, the existing research mainly verifies two questions: whether the resource curse exists and why it occurs. However, when investigating whether there is a resource curse in resource-based regions, we should not only consider the economic growth factor, the environmental consequences should be also included in the scope of the study (Boschni and Pettersson, 2007). Based on this, this paper comprehensively considers economic and environmental factors, and examines the impact of regional resource dependence caused by abundant resources on the ESG of its enterprises from the micro level.

The marginal contribution of this article is mainly reflected in the following aspects. Firstly, due to the fact that research on corporate ESG is still in its early stages, most studies on factors affecting corporate ESG are focused on the internal environment of the company. We discussed the impact of the external environment faced by the company, namely the resource dependence of the region where the company is located, on the ESG performance of the enterprise. This article explores the impact of enterprise resource dependence on its ESG performance from the perspective of enterprise resource acquisition, based on the theory of resource dependence. This article provides new empirical evidence for the literature on factors that affect corporate ESG performance. Secondly, current empirical studies on regional resource endowments and economic growth are mostly based on macro-level perspectives such as cross-country and domestic regions, while studies on resource endowments on micro-firm performance are still very limited. These studies have mostly focused on the economic performance of firms and rarely consider the environmental as well as social performance of firms. This paper provides micro-level evidence on this issue from the perspective of resource dependence on firm ESG performance. Last but not least, this paper further expands the research framework of the social and economic consequences of enterprise resource dependence. As an important consideration when making strategic decisions, resource dependence affects corporate social and environmental behavioral decisions, which in turn directly affects corporate ESG performance and has direct economic consequences.

Section 2 develops the theoretical hypothesis. Section 3 introduces the setting of the measurement model and the selection of variables. Section 4 shows the benchmark regression results and robustness test. Section 5 is a further analysis, exploring the impact of resource dependence on corporate ESG sub-score and the heterogeneity of the nature of enterprise ownership. Section 6 summarizes and puts forward policy recommendations and research prospects.

“Resource curse” theory suggests that abundant natural resources do not show a significant contribution to economic development, but rather a hindering effect. Numerous studies have shown that the crowding out effect of natural resources on investment in technology innovation and human capital leads to the occurrence of the resource curse (Gylfason, 2001). Due to the economic division of labor and long-term path dependence, regions with higher natural resource abundance are more likely to move towards a resource-dependent economic development path. The more resource-rich regions have labor-intensive attributes, and the local production is characterized by low-technology content (Ethier, 1985). Resource-dependent firms tend to aim for high revenues in the short term by engaging in production activities that consume large amounts of natural resources, such as extraction the primary processing. These firms are usually less exposed to low growth and technology, and thus less motivated to invest in technology development (Li et al., 2020). The high income of the resource sector attracts more labor and capital, accelerating the transfer of funds from R&D to the primary product sector, causing the aggravation of the resource mismatch problem, which is not conducive to the technological innovation of enterprises, and to a certain extent hinders the green development of enterprises. Fulfillment of social, environmental and governance responsibilities by enterprises is an activity with significant externalities and high costs, and investors’ investment decision was made based on corporate ESG performance (Crifo et al., 2015; Alsayegh et al., 2020). Sufficient production resource guarantee enables enterprises to obtain higher revenues and achieve rapid development in the short term, with little demand for external investors. Therefore, enterprises with strong resource dependence lack the incentive to fulfill their social, environmental and governance responsibilities. On the other hand, resource-dependent enterprises usually adopt a crude production model with high input, high consumption, high pollution and low technological level. And their production activities are often accompanied by greater environmental destructiveness and difficulty in safe production, with high environmental management costs (Song et al., 2022). In areas of low resource abundance and dependence, firms are limited in their activities to obtain resources from external sources and rely more on resource accumulation and internal capital allocation, as well as technological innovation and organizational change to create opportunities (Zhang et al., 2022). At the same time, the low abundance and low dependence environment intensifies competition. At a time when low carbon development and environmental issues are widely emphasized, companies need to actively fulfill their social and environmental responsibilities and improve their ESG performance to gain an advantageous position in the market. Based on the above analysis, the rising dependence of companies on resources is not conducive to enhancing the fulfillment of integrated social, environmental and governance performance. Therefore, hypothesis one of this paper is proposed.

Hypothesis 1: The dependence of enterprises on resources is mainly characterized by the “resource curse”, which has a negative impact on the environmental, social and governance performance of enterprises.

Resource dependency is mainly reflected in the degree of importance and intensity of influence of resource-based industries on the industrial structure, employment structure, level of technological progress, development speed and direction of the regional economy, which means the level of status and role of resource-based industries in the regional economic development. Although natural resources can bring direct or indirect benefits to society (Pan et al., 2022), excessive dependence on natural resources and resource-based industries can create a “resource curse” effect (Gylfason and Zoega, 2006; Brunnschweiler and Bulte, 2008), and the long-term dependence of the production process on resources will squeeze out R&D activities and cause the outflow of technological factors, which is not conducive to the innovation of energy-saving and environmental protection technologies. In addition, in terms of the regional distribution characteristics of natural resources in China, the degree of marketization in areas with high resource dependence is relatively low, so in terms of marketization environment, compared to areas with low resource dependence, enterprises in areas with high resource dependence have less incentive to innovate and their technological innovation level is relatively low. On the other hand, the crude production of resource-dependent enterprises is accompanied by a large amount of pollution emissions, and the technological base is not sufficient to compensate for the environmental management costs of the enterprises; therefore, the resource dependence of enterprises is not conducive to the fulfillment of their environmental responsibilities.

Enterprises are the main body of social responsibility. Social responsibility refers to the active engagement in socially responsible behavior that goes beyond the economic and legal requirements of the firm (Wood, 1991), and refers to the need for firms to take social responsibility for employees, consumers, suppliers, communities, and the environment in addition to generating profits and taking economic responsibility for shareholders (Clarkson, 1995), The resource-based theory suggests that whether a company takes more social responsibility depends on its own resources and capabilities (Barney, 1991; Grant, 1991; Hart, 1995), and that it is difficult for a company to meet the demands of all stakeholders at the same time due to limited financial resources. Resource dependence theory suggests that among many stakeholders, a firm will first focus on and deal with the interests of those who hold key resources to ensure its continued survival, and effective corporate governance is a necessary factor in the firm’s goal of maximizing profits. For resource-dependent enterprises, in addition to improving the efficiency of corporate governance, their long-term path dependence on resources as the main factor for production, as well as the high income of the resource sector itself is more attractive to factors of production such as labor, social responsibility-related interest holders will not affect the development of the enterprise to a certain extent, therefore, enterprises lack the motivation and incentive to fulfill social responsibility. Moreover, the pollution effect generated by the crude development mode of resource-dependent enterprises has strong negative externality and adversely affects the living environment of the surrounding residents; therefore, the increase of resource dependence has a hindering effect on the performance of corporate social responsibility. Based on the above analysis, the increase of resource dependency of enterprises will reduce the environmental and social performance of enterprises, while the effect on corporate governance is not obvious. Therefore, the second hypothesis of this paper is proposed.

Hypothesis 2: The inhibitory effect of increased resource dependence on corporate ESG performance is mainly reflected in the hindering effect on corporate fulfillment of social and environmental responsibilities.

State-owned enterprises (SOEs) are the mainstay of the national economy and an important subject responding to various national policies. Their main purpose is not to maximize corporate profits, but to maximize the welfare of the whole society. As important bearers of social responsibility, they are responsible for society and the environment in the process of production and operation, and maximize the creation of comprehensive economic, social and environmental value to promote the sustainable development of the national economy. However, SOEs are owned by the local government, which makes it easier to obtain rent-seeking benefits and reduces the motivation of enterprises to build their own capabilities. Therefore, they are less efficient than non-SOEs (Nie and Jia, 2011). Moreover, most SOEs belong to energy industries such as power supply industry, oil and gas extraction industry, which consume more resources and emit more pollution. They enjoy government guarantees and financial support, and have many ways to obtain resources with less difficulty. Therefore, it is easier to form a resource-dependent development path and lack the motivation for technological innovation and green transformation. For non-SOEs, social, environmental and governance performance are important factors in attracting investors. In the fierce market competition, non-SOEs whose main goal is profit maximization have an accumulating effect (Huang et al., 2022), which makes them more motivated to fulfill their social and environmental responsibilities and improve their corporate governance efficiency. Based on the above analysis, the negative effect of resource dependence on the ESG rating of enterprises is mainly reflected in SOEs. Therefore, the third hypothesis of this paper is proposed.

Hypothesis 3: The effect of resource dependence on ESG performance is non-consistent for firms with different ownership properties, and the negative effect is particularly pronounced for state-owned enterprises.

This article uses data from A-share listed companies from 2011 to 2020 to find that the higher the resource dependence of the company’s location, the worse the ESG performance of the enterprise. This conclusion still holds after a series of robustness tests. Through regression analysis of regional resource dependence from three dimensions: environment, society, and governance, it was found that resource dependence has a significant negative impact on environmental and social performance. In areas with high resource dependence, the negative impact on enterprises may outweigh the growth effect brought by resources. The sub sample regression results based on the nature of enterprise ownership indicate that the resource dependence of state-owned enterprises has a significant negative impact on their ESG scores. However, no significant correlation was found in the sample of non-state-owned enterprises. The reason may be that non-state-owned enterprises are more actively seeking the comprehensive development of ESG due to fierce market competition and financing pressure, offsetting the negative impact of resource dependence.

Based on the above analysis, we propose the following suggestions: Firstly, the particularity of the development of resource dependent regions determines that we cannot rely solely on market tools to enhance the enthusiasm and initiative of enterprises to fulfill social and environmental responsibilities. Government support and policy guidance are the practical conditions for promoting green transformation of enterprises. At the macro policy level, it is necessary to further enhance the stability of policies, form a foreseeable long-term benefit driven mechanism for the green transformation and development of enterprises, make improving social and environmental performance a consensus for the development of resource-based enterprises, and reduce the short-term risks and costs of companies fulfilling social and environmental responsibilities. At the micro policy level, in the short term, it is necessary to reduce the costs, risks, and uncertainties of implementing green transformation and fulfilling social and environmental responsibilities for high resource dependent enterprises through tilted allocation of production factors, tax incentives, and subsidies, so as to provide stable profit margins for enterprises that actively fulfill social and environmental responsibilities. At the local government level, it is necessary to continuously improve the software and hardware infrastructure of resource-based areas, actively promote the development of non resource-based enterprises, and reduce the resource dependence of regional development and the opportunity cost of green development for enterprises. Secondly, from the perspective of the capital market, relevant financial institutions should further improve their ESG ratings to provide investors with a reliable value investment foundation, thereby pointing the direction for the sustainable development of enterprises. Again, from the perspective of enterprises, resource-based state-owned enterprises are the economic mainstay of resource-based regions and the guarantee of national resource and energy strategic security. They will inevitably undertake new historical missions in the context of low-carbon transformation. On the one hand, resource-based state-owned enterprises need to improve resource utilization efficiency, enhance resource recycling level, achieve green transformation, and better fulfill social and environmental responsibilities. On the other hand, resource-based state-owned enterprises are large and strong. They should effectively drive the social and environmental performance of industries, improve the efficiency of industrial green transformation, drive the development of resource-based regional green transformation, and improve the regional environment through the positive externalities generated by their own green transformation.

This article attempts to analyze in depth the impact of resource dependence on corporate social and environmental performance when studying the relationship between resource dependence and corporate behavior. Some conclusions have been drawn, which are consistent with the research results of relevant literature and provide reference for future research ideas and directions. With the deepening of research on enterprise resource dependence and social environmental behavior, it is necessary to improve research methods and incorporate more influencing factors, mechanism channels, and situational factors into the analysis framework. For example, the micro mechanism of the impact of resource dependence on corporate ESG performance can be explored through field research. In addition, the theoretical model of resource dependent corporate behavior still needs further expansion. The vast majority of literature typically only considers one type of corporate behavior, and there are few studies that comprehensively consider the comprehensive impact of multiple corporate behaviors. Therefore, establishing a unified theoretical framework that considers the interaction between resource dependent corporate behavior from three aspects: social, environmental, and corporate governance, and measuring its relative importance, is an important direction for future research.

The original contributions presented in the study are included in the article/supplementary material. Further inquiries can be directed to the corresponding author.

YF: Formal Analysis, Methodology, Software, Writing – original draft. LF: Investigation, Software, Writing – review & editing. ZL: Methodology, Supervision, Validation, Writing – review & editing. WL: Conceptualization, Data curation, Writing – original draft.