| In the face of increasingly severe environmental challenges and complex social development issues, the concept of Environmental, Social, and Governance (ESG) emphasizes that while pursuing economic profits, entities—including cities as key agents of development—should assume responsibility for ecological protection, social welfare, and institutional governance. This study introduces the ESG framework into urban development by constructing a city-level ESG evaluation system based on the entropy-weighted TOPSIS method and principal component analysis. It assesses the ESG performance of 282 Chinese cities from 2011 to 2022 and employs a Markov transition probability matrix to analyze the dynamic transition characteristics of cities at different development levels. Furthermore, the study applies the system GMM approach to identify the key drivers of urban ESG performance and conducts regional regression analyses for eastern, central, and western China to uncover heterogeneous influence mechanisms across regions.
The empirical results reveal that: (1) China's urban ESG index has exhibited a steady upward trend over the past decade, with notable improvements in environmental governance, although the social and governance dimensions still present considerable room for enhancement; (2) the overall distribution of ESG development levels demonstrates a typical pyramid structure with strong persistence—most cities remain at lower levels while high-level cities are few, and many mid-level cities face a risk of regression, while upward mobility remains difficult for low-level cities, suggesting the continued need for targeted policy interventions despite a narrowing regional gap; (3) significant spatial disparities in ESG levels persist, with eastern coastal cities outperforming due to stronger economic foundations and institutional capacity, while central, western, and northeastern regions lag behind but show substantial development potential; (4) Environmental regulation, higher education, industrial upgrading, and openness are identified as critical drivers of ESG performance, but their effects vary markedly across both regions and city sizes. Eastern cities benefit from synergistic industrial and environmental policy coordination; central cities rely on institutional enforcement and educational resources; and western cities are primarily supported by policy-driven interventions and foundational capacity building. Meanwhile, city-scale heterogeneity reveals that megacities face development bottlenecks requiring innovative governance solutions; large cities show either path dependence or differentiated drivers such as foreign capital or education; and small and medium-sized cities struggle with governance deficits and resource constraints, necessitating institutional support and financial empowerment. This study underscores the value of integrating ESG principles into urban governance frameworks and highlights the need for institutional innovation, resource coordination, and capacity development to transition from exogenous policy-driven ESG progress to endogenous, sustainable urban growth under the new urbanization paradigm. |
