How ESG Performance Promotes Organizational Resilience: The Role of Ambidextrous Innovation Capability and Digitalization

ABSTRACT

Enterprises are increasingly under pressure to respond to volatile market environments and uncertainties. Although higher environmental, social, and governance (ESG) performance facilitates the stabilization of corporate operations, studies provide limited understanding on how ESG performance affects organizational resilience. By analyzing dataset from China's listed enterprises from 2010 to 2023, this research examines the connection between ESG performance and organizational resilience, as well as its influence mechanism. Results evidence that ESG performance significantly increases organizational resilience. In addition, ESG performance promotes organizational resilience by improving ambidextrous innovation capability (AIC). Further analysis indicated that digitalization amplified the positive influence of ESG on financial volatility. Our research determines the value of ESG, AIC, and digitalization in assisting enterprises to develop a resiliency capability to cope with threat and stressful environment. This research offers a novel theoretical perspective through the integration of stakeholder theory and dynamic capability view (DCV) to explore how ESG promotes organizational resilience by releasing the value of its own, AIC and digitalization. It offers practical implications for practitioners to shape strategies to actively embracing ESG practices, nurturing dynamic capabilities, such as AIC and higher degree of digitalization to effectively promote organizational resilience to respond to crises and uncertainty.