ESG and resource acquisition in Chinese startups: The role of financing strategies and resource constraints

Technological Forecasting and Social Change. 2026. Vol. 2028. P. 1–13.

Bo S., Christofi M., Battisti E., Papa A.

In the face of rising sustainability expectations and limited resources, startups must balance financial objectives with ESG (environmental, social, and governance) goals under uncertainty. This study examines how ESG behavior influences external resource acquisition, financing choices, and strategic outcomes in early-stage enterprises. Drawing on the entrepreneurial learning perspective, we argue that startups refine ESG strategies through experimentation, feedback, and contextual reflection, making ESG engagement an evolving process rather than a one-off decision. Using a panel dataset of 1431 startups listed on China's A-share market from 2018 to 2023, we construct a composite ESG behavior index (ESGB) and employ logit and panel OLS models with lagged variables and cluster-robust standard errors. Results indicate ESG engagement increases the likelihood of securing venture capital (VC) and shapes financing strategies (FS), favoring external equity financing. ESG behavior does not significantly affect government subsidies (GOVS), suggesting policy allocation depends on broader institutional factors. Under resource constraints (RC), ESG engagement enhances growth capacity (GC), while effects on diversification (DIV) and stability (STA) are context-dependent. Theoretically, the study advances a dynamic, capability-based view of ESG by integrating resource-based and signaling perspectives. Practically, it provides insights for entrepreneurs, investors, and policymakers for sustainable development in startup ecosystems.

Keywords: China, startups, ESG, resource constraint, entrepreneurial learning, Financing strategies, Resource acquisition

Publication based on the results of: Study of the factors and conditions for enhancing the innovation actors in achieving technological sovereignty (2025)