https://archive.conscientiabeam.com/index.php/29 Conscientia Beam en-US The Economics and Finance Letters 2312-6310 https://archive.conscientiabeam.com/index.php/29/article/view/4923 <p>Growing demands for non-financial information have increased the importance of environmental, social, and governance (ESG) disclosures in corporate decision-making. This study examines whether ESG performance improves investment efficiency in Chinese A-share listed firms and investigates whether audit quality mediates this relationship. Using a panel dataset of Chinese A-share firms from 2012 to 2023, ESG performance is measured using Bloomberg ESG pillar scores, while investment efficiency is estimated based on deviations from optimal investment levels. Firm-level fixed-effects regression models are employed to control for unobserved heterogeneity, and mediation analysis is applied to assess the indirect effect of audit quality. The empirical results indicate that ESG performance has a significant and positive effect on investment efficiency. A one-unit increase in ESG score is associated with an improvement of approximately 0.027 in investment efficiency at the 1% significance level. Audit quality, proxied by engagement with Big-4 auditors, is also positively associated with investment efficiency, with an estimated effect of about 0.006. Mediation analysis confirms that audit quality partially transmits the influence of ESG performance on investment efficiency, suggesting that high-quality auditing enhances the credibility of ESG disclosures and strengthens their role in guiding efficient investment decisions. These findings have important practical implications. Firms can improve investment efficiency by strengthening ESG practices and engaging high-quality auditors. Policymakers and regulators may enhance capital allocation efficiency by promoting standardized ESG disclosure requirements and improving audit oversight.</p> Surayya Jamal Asma Imran Kiran Mustafa Ansar Ali Faraz Shafiq Ur Rehman Copyright (c) 2026 2026-04-21 2026-04-21 13 2 1 15 10.18488/29.v13i2.4923 https://archive.conscientiabeam.com/index.php/29/article/view/4925 <p>The Sustainable Development Goals (SDGs) constitute an indivisible agenda for achieving economic development, environmental sustainability, and social inclusion. Green budgeting, in which sustainability considerations are incorporated into public investment allocations, has emerged as a key fiscal tool to advance this agenda. This article investigates the evolving link among green budgeting, fiscal efficiency, and sustainable development performance using Indonesian local governments as a case study. Based on district and city panel data for the years 2018 to 2022, and adopting the Structural Equation Modeling–Partial Least Squares (SEM-PLS) mediated analysis technique, our results suggest that green budgeting and fiscal efficiency positively and significantly influence SD outputs. The measurement constructs are demonstrated to be statistically valid and reliable. The findings also suggest that fiscal effectiveness mediates the linkages between green budgeting and development performance. The estimated impact of green budgeting on sustainable development amounts to 0.585, indicating that greener expenditure is associated with lower poverty-alleviation costs (HD index) and better ecosystem conditions. Despite Java being the most developed part of Indonesia, the analysis reveals ongoing structural weaknesses that signify continued spatial imbalances in development outcomes. These have implications for the introduction of green budgeting as an integrated fiscal framework at local and regional levels to mitigate regional disparities and enhance policy performance. Our study helps assess sustainability-oriented public finance actions in central and local governments, as well as provides policy guidance on integrating green budget performance assessment, technical guidance, performance indicators, and incentive systems based on financial efficiency.</p> Sugeng Suroso Chajar Matari Fath Mala Sapto Jumono Copyright (c) 2026 2026-04-22 2026-04-22 13 2 16 30 10.18488/29.v13i2.4925