The Co-Inhibiting Effect of Managerial Myopia on ESG Performance-Based Green Investment and Continuous Innovation

Comments 1: The authors have chosen Chinese A-share listed companies as the context for their study, but the manuscript lacks a thorough justification for this choice. It would be beneficial for the authors to elaborate on why this specific context is particularly relevant for studying the impact of managerial myopia on ESG performance. They should also discuss how the findings might differ in other contexts, such as different types of markets or countries with varying governance structures.

Response 1: Thank you for pointing this out. In the second paragraph of the first part of the original article, the paper elaborated on the unsatisfactory ESG performance of Chinese listed companies, which is also an important reason why we choose Chinese listed companies as the context. However, we really did not highlight the importance of selecting samples in the original paper. In view of this, we have added relevant content in the third paragraph of the first part and marked it in red. The details are as follows.

The upper echelons theory is based on the cognitive psychology of managers to explore the strategic choice of management in the face of complex internal and external environmental changes. Corporate ESG performance, as an important means to achieve sustainable development and undertake social responsibilities, is bound to be affected by the characteristics of managers. In addition, the ESG performance of Chinese listed companies still has a large room for improvement, so it is of great significance to explore how management characteristics improve the ESG performance. Based on upper echelons theory and stakeholder theory, this paper takes Chinese A-share listed companies from 2011 to 2022 as samples to empirically analyze the impact of managerial myopia on corporate ESG performance. The results show that managerial myopia significantly inhibited the ESG performance of enterprises. After a series of robustness tests, the conclusion remained valid. Managerial myopia significantly inhibits corporate environmental and social responsibility, but it helps improve the level of corporate internal governance. Managerial myopia restrains the improvement of enterprise ESG performance by inhibiting enterprise green investment and green innovation sustainability. For state-owned enterprises (SOEs), heavily polluting enterprises (HPEs), non-high-tech enterprises, and enterprises in the growth period, the inhibitory effect of managerial myopia on ESG performance is stronger. In terms of external governance, greater analyst attention and public environmental concern (PEC) are conducive to reducing the inhibitory effect of managers’ shortsightedness on ESG performance.

Thanks again for the reviewer's valuable comments. As the reviewer said, the impact of managerial myopia on ESG performance will be different in different types of markets or countries with varying governance structures. However, the analysis of the differences shown by the above two points will be a huge work, which is the focus of our next article. In addition, the original article carries out a large number of heterogeneity analysis based on the perspectives of enterprise nature, life cycle, analyst concern and public environmental concern. Therefore, we add the shortcomings of this study and future research prospects in the Conclusion and Implications section (Section 7). The details are as follows.

Due to the limitation of space, this paper only makes a detailed demonstration from the actual situation in China. However, the impact of managerial myopia on ESG performance is also different in many areas, such as different types of markets or countries with varying governance structures. In particular, the generalization of the conclusion of the Chinese market to emerging or developed markets needs to be further proved.

Comments 2: While the focus on Chinese A-share companies is appropriate for the study, the paper may benefit from a more explicit discussion on the generalizability of the findings to other emerging or developed markets. The influence of state ownership, for example, might differ significantly in other contexts.

Response 2: Thanks to the reviewers for your recognition and comments on this study. Compared with other emerging or developed markets, there are certainly many differences in the impact of managerial myopia on ESG performance in Chinese market, but our research is based on the Chinese market. Moreover, there are many differences in listed companies and ESG evaluation standards in different countries. It's a huge undertaking to understand the differences in state ownership perspectives across countries, and it requires a whole article to be presented. Thanks to the reviewers for providing us with innovative research perspectives for the next new working papers. Therefore, we add the shortcomings of this study and future research prospects in the Conclusion and Implications section (Section 7). The details are as follows.

Due to the limitation of space, this paper only makes a detailed demonstration from the actual situation in China. However, the impact of managerial myopia on ESG performance is also different in many areas, such as different types of markets or countries with varying governance structures. In particular, the generalization of the conclusion of the Chinese market to emerging or developed markets needs to be further proved.

Comments 3: The proxy used for measuring managerial myopia, based on text analysis of MD&A sections, while innovative, might not fully capture the multidimensional nature of short-termism. The authors could consider discussing potential limitations and exploring alternative measures.

Response 3: Thank you for pointing this out. Thanks to the reviewer for providing us with a new perspective of robustness testing. The paper further takes the ratio between the current short-term investment and the initial enterprise total assets to measure as a surrogate variable for managerial myopia. We have modified the table information and the corresponding text together, as follows.

5.4 Robustness tests

5.4.1 Replace dependent variable

The construction of ESG helps enterprises establish a good social image and thus attract more investor attention. Therefore, myopic managers have an incentive to deliberately exaggerate ESG performance to benefit from their self-interested behaviors. Although, Huazheng ESG rating comprehensively considers the quality of information disclosure, CSRC punishment, precision poverty alleviation and other indicators, which is more suitable for China's reality. However, there are many differences in the rating results caused by rating agency mistakes. The Bloomberg ESG ratings cover multiple segments of environmental, social and corporate governance. It is comprehensive and applies to the ratings of listed companies in different countries. Therefore, to ensure the robustness of the regression results and avoid bias in the ESG assessments of a single institution, this paper further uses Bloomberg ESG rating data to perform regression of Model (1) again, and the conclusions remain unchanged, as shown in Column (1) of Table 6.

5.4.2 Replace explanatory variables

The short-sighted behavior of managers can be reflected not only through semantic expression, but also through their investment decisions for enterprises. Further, this paper refers to Yu Yihua et al. (2018) and uses the ratio between the current short-term investment and the initial enterprise total assets to measure the managerial myopia [65], where the short-term investment of enterprises is the sum of transactional financial assets, net available-for-sale financial assets and net hold-to-maturity investment. The regression of model (1) is carried out again, and the conclusion is still valid, as shown in column (2) of Table 6.

5.4.3 Adjust the sample period

In recent years, China's exchanges and CSRC have implemented increasingly strict requirements for the ESG information disclosure of enterprises, but the disclosure requirements of different institutions are not the same. In September 2018, the CSRC promulgated the "Governance Code for Listed Companies" to make uniform provisions for all listed companies to disclose environmental and social responsibility information. In view of this, to avoid differences in ESG ratings caused by different disclosure criteria, this paper changes the sample period to 2019-2022 and performs the regression again, and the conclusions remain the same, as shown in Table 6.

5.4.4 Replace the estimation method

Because many influencing factors affect ESG performance and the ESG performance of different enterprises varies greatly, this paper adopts a quantile regression model to analyze the relationship between managerial myopia and enterprise ESG performance to study differences in the degree of influence. The results in Columns (4) to (6) of Table 6 show that the regression coefficients at the three quantiles are all significantly negative at the 10% confidence level, indicating that managerial myopia has an obvious inhibitory effect on ESG performance and that this inhibitory effect decreases with the improvement of managerial myopia.

Table 6. Robustness test

Comments 4: The study relies heavily on Huazheng ESG ratings, which may not be as widely recognised or comparable to international standards. While the authors address this in the robustness checks, further discussion on the limitations of these metrics and their implications for the study's conclusions would be valuable.

Response 4: Thank you for your comment. As the reviewer said, we used the ESG rating data of Bloomberg to replace the Huazheng ESG for robustness test, but we really did not describe the advantages and disadvantages of the two rating methods. Therefore, we further emphasize that Huazheng ESG is more in line with China's reality, while Bloomberg rating has a wider scope of application and indicator coverage. For details, see section 5.4.1.

5.4.1 Replace dependent variable

The construction of ESG helps enterprises establish a good social image and thus attract more investor attention. Therefore, myopic managers have an incentive to deliberately exaggerate ESG performance to benefit from their self-interested behaviors. Although, Huazheng ESG rating comprehensively considers the quality of information disclosure, CSRC punishment, precision poverty alleviation and other indicators, which is more suitable for China's reality. However, there are many differences in the rating results caused by rating agency mistakes. The Bloomberg ESG ratings cover multiple segments of environmental, social and corporate governance. It is comprehensive and applies to the ratings of listed companies in different countries. Therefore, to ensure the robustness of the regression results and avoid bias in the ESG assessments of a single institution, this paper further uses Bloomberg ESG rating data to perform regression of Model (1) again, and the conclusions remain unchanged, as shown in Column (1) of Table 6.

Comments 5: The paper identifies green investment and innovation sustainability as mediating factors, the discussion on the causal mechanisms could be expanded. For instance, how do specific managerial characteristics (e.g., risk aversion, tenure) drive myopic behaviour in different contexts?

Response 5: Thank you for your comment. The reviewers provide us with a more detailed research perspective. We further analyze the heterogeneity from the perspective of CEO tenure and CEO risk appetite, and get valuable conclusions. See sections 6.2.5 and 6.2.6 for specific changes.

6.2.5 CEO Risk Preference

Managers' risk preference has a positive impact on enterprises' investment decisions and social responsibility. Companies with risk-seeking CEOs tend to have higher levels of social responsibility. In view of this, this paper refers to Gao (2022) definition of risk-appetite CEO [70], and divides the sample into CEO risk preference group (Risk_high) and CEO risk aversion group (Risk_low). Among them, risk-seeking CEOs represent that the proportion of the total assets of trading financial assets, available for sale financial assets and investment real estate assets in the total assets of this year is higher than the average level of the same industry. By comparing columns (1) and (2) of Table 12, it is found that the restraining effect of managerial myopia on the ESG performance is more severe in enterprises with risk-appetite CEOs.

Table 12. Heterogeneity of CEO risk preference and CEO tenure

6.2.6 CEO Tenure

The tenure of managers will affect the overall strategic decision-making of enterprises and further affect the overall performance [71]. Therefore, this paper is divided into groups based on the three-year tenure of the CEO, in which the tenure of the CEO is more than three years as the long-tenure group (Tenure_long), otherwise as the short-tenure group (Tenure_short). By comparing columns (3) and (4) of Table 12, it is found that in enterprises with long CEO tenure, managers' short-termism significantly inhibits their ESG performance; However, in companies with short CEO tenure, managers' short-sightedness is no longer significant for ESG performance. This also proves that the longer a CEO stays in office, the less likely he or she is to be reappointed, which will exacerbate the short-sighted behavior of managers.

At the same time, the conclusions and references are revised simultaneously. The details are as follows:

7. Conclusions and Implications

As a long-term strategic choice for enterprises, ESG performance can not only support the implementation of China's “carbon peaking and carbon neutrality” goal but also help accelerate the formation of new, quality productivity. Because managers are the decision-making personnel regarding future enterprise development, their personal characteristics are crucial to long-term investment and strategic development. Based on upper echelons theory and stakeholder theory, this paper takes Chinese A-share listed companies from 2011 to 2022 as samples to empirically analyze the impact of managerial myopia on ESG performance. The research indicated the following five main findings. (1) Managerial myopia significantly inhibits ESG performance, a conclusion that remains valid after a series of robustness tests. (2) Managerial myopia effectively inhibits corporate environmental and social responsibility performance but helps improve corporate internal governance. (3) Managerial myopia significantly inhibits corporate ESG performance, primarily by inhibiting corporate green investment and green innovation sustainability. This also confirms that managerial myopia will hinder enterprises' long-term investment under the influence of short-term orientation [21]. (4) From the perspective of enterprise attributes, for SOEs, heavily polluting enterprises and non-high-tech enterprises, managerial myopia has a stronger inhibitory effect on ESG performance. When an enterprise is in the growth stage, the myopic behavior of managers has the stronger blocking effect on improving ESG performance. (5) From the perspective of corporate external governance, greater analyst attention and greater PEC are conducive to weakening managerial myopia in terms of ESG performance. (6) From the perspective of management attributes, when the CEO is risk preference, the manager's myopic behavior has a stronger blocking effect on ESG performance; When the tenure of management is short, managerial myopic has no significant impact on ESG performance.

Comments 6: The authors need to provide a more detailed explanation of the study models used in their analysis. Specifically, they should clarify what types of regression models were employed and discuss whether diagnostic tests (e.g., tests for multicollinearity, heteroscedasticity, and normality of residuals) were conducted before running the final models. This information is crucial for ensuring the robustness and validity of the results, and its inclusion would greatly enhance the methodological rigour of the study.

Response 6: Thank you for your comment. The author has carried out tests such as multicollinearity and heteroscedasticity before regression, which are not presented due to space limitations. As suggested by the reviewer, we now make improvements for the study's rigor, as detailed in Section 5.2.

5.2 Benchmark regression

First, we conducted a multicollinearity test on the regression model, and found that the mean VIF of the model was 1.61 and the maximum VIF was 2.89, indicating that the variables selected in this paper were reasonable and there was no multicollinearity problem. At the same time, in order to alleviate the interference of heteroscedasticity on the research conclusion, this paper adopts robust standard error to conduct multiple regression analysis of the variables. Then，Hypothesis H1 is verified to examine the impact of managerial myopia on ESG performance, as shown in Table 4. Without the addition of control variables and various fixed effects, the results in Column (1) show that the regression coefficients of managerial myopia on ESG performance are significant at the 1% confidence level. When fixing time, industry, and province effects and clustering for enterprises, the results in Column (2) show that the regression coefficients are significantly enhanced. After adding control variables and gradually controlling for the fixed effects of time-time and industry-time, industry and province, the regression results in Columns (3)-(6) are still significant. The results in Column (6) show that the regression coefficient at a confidence level of less than 5% is significantly negative, indicating that for every 1% reduction in managerial myopia, ESG performance will improve by 0.045%. Therefore, Hypothesis H1 is confirmed, and the regression results of the control variables are basically in line with expectations.

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Comments 7: The discussion of the study results would benefit from a more comprehensive comparison with findings from previous studies. Currently, the manuscript presents its results without fully situating them within the broader literature. The authors should explicitly compare their findings with those of similar studies on managerial myopia, ESG performance, and green investment, highlighting consistencies or discrepancies. This would strengthen the manuscript by providing readers with a clearer understanding of how this study contributes to and extends the existing body of knowledge.

Response 7: Thank you for your comment. In the introduction part of the original article, the author combs the marginal contribution of the article and the extended conclusions of this study in detail. In order to further highlight the consistency of the conclusion, we have also made corresponding modifications in the conclusion. All changes are as follows.

1. Introduction

The main contributions of this paper are as follows. (1) This paper contributes to the understanding of the economic effects of managerial myopia. Most previous studies have focused on the impact of managerial myopia on corporate performance and long-term investment. This paper innovatively integrates the temporal cognitive attributes of managerial myopia and the environment, social responsibility and corporate governance of microenterprises into a unified research framework. This finding also confirms that managerial myopia can inhibit corporate environmental and social responsibility performance. Due to the limitations of managers' time cognition, enterprises pay more attention to internal governance. (2) This paper broadens the influence mechanism of enterprise ESG performance. Numerous studies have explored many factors affecting enterprises’ ESG performance from the perspectives of the macroeconomic environment, industrial policy and microenterprises. However, this paper focuses on the cognitive attributes of managerial myopia and verifies that managerial myopia leads to insufficient green investment and weak sustainability of green innovation, which eventually inhibits ESG performance. This study provides a new research perspective and evidence for the impact of managers' personal attributes on ESG performance. (3) This paper provides actionable governance solutions to prevent managerial myopia from affecting ESG performance. By clarifying the influence of managerial myopia on ESG performance, we further find that the inhibitory effect is stronger for SOE, HPE, and non-high-tech enterprises as well as enterprises in the growth stage. For external governance, the greater the analyst attention and PEC are, the more conducive they are to alleviating the inhibiting effect.

7. Conclusions and Implications

As a long-term strategic choice for enterprises, ESG performance can not only support the implementation of China's “carbon peaking and carbon neutrality” goal but also help accelerate the formation of new, quality productivity. Because managers are the decision-making personnel regarding future enterprise development, their personal characteristics are crucial to long-term investment and strategic development. Based on upper echelons theory and stakeholder theory, this paper takes Chinese A-share listed companies from 2011 to 2022 as samples to empirically analyze the impact of managerial myopia on ESG performance. The research indicated the following five main findings. (1) Managerial myopia significantly inhibits ESG performance, a conclusion that remains valid after a series of robustness tests. (2) Managerial myopia effectively inhibits corporate environmental and social responsibility performance but helps improve corporate internal governance. (3) Managerial myopia significantly inhibits corporate ESG performance, primarily by inhibiting corporate green investment and green innovation sustainability. This also confirms that managerial myopia will hinder enterprises' long-term investment under the influence of short-term orientation [21]. (4) From the perspective of enterprise attributes, for SOEs, heavily polluting enterprises and non-high-tech enterprises, managerial myopia has a stronger inhibitory effect on ESG performance. When an enterprise is in the growth stage, the myopic behavior of managers has the stronger blocking effect on improving ESG performance. (5) From the perspective of corporate external governance, greater analyst attention and greater PEC are conducive to weakening managerial myopia in terms of ESG performance. (6) From the perspective of management attributes, when the CEO is risk preference, the manager's myopic behavior has a stronger blocking effect on ESG performance; When the tenure of management is short, managerial myopic has no significant impact on ESG performance.

Comments 8: The policy recommendations, while relevant, are somewhat general. The paper could benefit from more targeted suggestions, particularly in relation to corporate governance reforms that could mitigate managerial myopia in different types of firms.

Response 8: Thank you for your comment. The author further improved the countermeasures and suggestions, as follows.

7. Conclusions and Implications

Based on the above conclusions, this paper provides the following suggestions.

(1) The selection mechanism of senior managers should be optimized, and the innovation and development of enterprises should be encouraged. Therefore, in addition to paying attention to general attributes such as age, gender, education background and management ability, enterprises should also should also focus on selecting managers who have long-term orientation, certain risk appetite and are not persistent in the pursuit of existing investment areas, especially in SOEs, heavily polluting enterprises and non-high-tech enterprises. Enterprises should also reinforce the attention and the cognition of the concept of sustainable development, increase investment in innovation research and development, ensure the sustainability of innovation investment, and establish a governance mechanism for promoting green development of enterprises through innovation.

(2) Internal and external governance work together to constrain the myopic behavior of management. It is necessary to continuously strengthen the supervision of microenterprises by analysts and the public in the fields of environmental and social responsibility, to encourage listed companies to carry out green investment and green innovation and constantly improve their social responsibility performance and environmental awareness, to help enterprises develop sustainably, and to reduce the negative impact of the myopic behavior of management. It is necessary to encourage listed companies to establish the management myopic evaluation mechanism, increase long-term governance pressure, broaden their decision-making horizons, cultivate their strategic planning awareness, and fundamentally curb short-sighted management behaviors.

Comments 1: the marginal contribution of the article needs to bring in relevant literature to highlight the contribution of this article.

Response 1: Thank you for pointing this out. In the part of literature review, the author systematically combs the relevant studies and points out the shortcomings of previous studies. In order to avoid repetition, the marginal contribution part of the first part is not repeated.

Comments 2: the empirical table brackets need to be replaced with robust standard errors instead of t-values, and all decimal points need to be harmonized.

Response 2: Thank you for pointing this out. The full text of the data in the table is revised as follows.

Table 2. Descriptive statistics of variables

Table 4. Baseline regression results

Note：*** p<0.01, ** p<0.05, * p<0.1

Table 6. Robustness test

Table 7. Results of endogeneity test

Table 9. Results of enterprise heterogeneity analysis

Comments 3: the mediation effect test using the three-step method has a relatively large endogeneity problem, it is recommended to be more for the two-step method or causal effect model.

Response 3: Thank you for your comment. In this paper, two-step method is used to replace the original three-step method. The authors have made comprehensive revisions to the model introduction, regression results and analysis, as follows.

4.4.2 Mechanism regression model

To test Hypotheses 2 and 3, this paper constructs a two-stage model to explore the two transmission paths through which managerial myopia restrains ESG performance, that is, by hindering green investment and by inhibiting the sustainability of enterprise green innovation. The model settings are as follows.

     (2)

     (3)

Equations (2) and (4) reflect the impact of managerial myopia on green investment and the sustainability of green innovation. The parameters  and  are significantly negative, indicating that there is a suppressive effect.

6.1 Mechanism analysis

To further verify whether managerial myopia reduces overall ESG performance by inhibiting green investment and green innovation sustainability, Models (2) to (3) are regressed one by one, and the results are shown in Table 8. The results in Columns (1) and (2) show that the regression coefficients between  and  () are significant at the 1% and 5% confidence levels, respectively, indicating that managerial myopia can significantly inhibit green investment behavior and reduce the sustainability level of green innovation, and two paths: “managerial myopia → (reduce) green investment → (inhibit) corporate ESG performance” and “managerial myopia → (reduce) green innovation sustainability → (inhibit) corporate ESG performance”. Hypotheses 2 and 3 are verified, which reflects that shortsighted managers have a serious lack of primary motivation to optimize corporate green investment and continuously improve green innovation.

Table 8. Results of mechanism test

Comments 4: Countermeasure suggestions need to be based on the findings of this paper, and it is suggested to rewrite the countermeasure suggestions.

Response 4: The author further improved the countermeasures and suggestions, as follows.

7. Conclusions and Implications

Based on the above conclusions, this paper provides the following suggestions.

(1) The selection mechanism of senior managers should be optimized, and the innovation and development of enterprises should be encouraged. Therefore, in addition to paying attention to general attributes such as age, gender, education background and management ability, enterprises should also should also focus on selecting managers who have long-term orientation, certain risk appetite and are not persistent in the pursuit of existing investment areas, especially in SOEs, heavily polluting enterprises and non-high-tech enterprises. Enterprises should also reinforce the attention and the cognition of the concept of sustainable development, increase investment in innovation research and development, ensure the sustainability of innovation investment, and establish a governance mechanism for promoting green development of enterprises through innovation.

(2) Internal and external governance work together to constrain the myopic behavior of management. It is necessary to continuously strengthen the supervision of microenterprises by analysts and the public in the fields of environmental and social responsibility, to encourage listed companies to carry out green investment and green innovation and constantly improve their social responsibility performance and environmental awareness, to help enterprises develop sustainably, and to reduce the negative impact of the myopic behavior of management. It is necessary to encourage listed companies to establish the management myopic evaluation mechanism, increase long-term governance pressure, broaden their decision-making horizons, cultivate their strategic planning awareness, and fundamentally curb short-sighted management behaviors.

Comments 1: Management myopia measurement: The use of textual analysis is innovative, nonetheless, a more in-depth discussion of the viability and reliability of such a measure would benefit the readers.

Response 1: Thank you for pointing this out. Thanks to the reviewer for providing us with a new perspective of robustness testing. The paper further takes the ratio between the current short-term investment and the initial enterprise total assets to measure as a surrogate variable for managerial myopia. We have modified the table information and the corresponding text together, as follows.

5.4 Robustness tests

5.4.1 Replace dependent variable

The construction of ESG helps enterprises establish a good social image and thus attract more investor attention. Therefore, myopic managers have an incentive to deliberately exaggerate ESG performance to benefit from their self-interested behaviors. Although, Huazheng ESG rating comprehensively considers the quality of information disclosure, CSRC punishment, precision poverty alleviation and other indicators, which is more suitable for China's reality. However, there are many differences in the rating results caused by rating agency mistakes. The Bloomberg ESG ratings cover multiple segments of environmental, social and corporate governance. It is comprehensive and applies to the ratings of listed companies in different countries. Therefore, to ensure the robustness of the regression results and avoid bias in the ESG assessments of a single institution, this paper further uses Bloomberg ESG rating data to perform regression of Model (1) again, and the conclusions remain unchanged, as shown in Column (1) of Table 6.

5.4.2 Replace explanatory variables

The short-sighted behavior of managers can be reflected not only through semantic expression, but also through their investment decisions for enterprises. Further, this paper refers to Yu Yihua et al. (2018) and uses the ratio between the current short-term investment and the initial enterprise total assets to measure the managerial myopia [65], where the short-term investment of enterprises is the sum of transactional financial assets, net available-for-sale financial assets and net hold-to-maturity investment. The regression of model (1) is carried out again, and the conclusion is still valid, as shown in column (2) of Table 6.

5.4.3 Adjust the sample period

In recent years, China's exchanges and CSRC have implemented increasingly strict requirements for the ESG information disclosure of enterprises, but the disclosure requirements of different institutions are not the same. In September 2018, the CSRC promulgated the "Governance Code for Listed Companies" to make uniform provisions for all listed companies to disclose environmental and social responsibility information. In view of this, to avoid differences in ESG ratings caused by different disclosure criteria, this paper changes the sample period to 2019-2022 and performs the regression again, and the conclusions remain the same, as shown in Table 6.

5.4.4 Replace the estimation method

Because many influencing factors affect ESG performance and the ESG performance of different enterprises varies greatly, this paper adopts a quantile regression model to analyze the relationship between managerial myopia and enterprise ESG performance to study differences in the degree of influence. The results in Columns (4) to (6) of Table 6 show that the regression coefficients at the three quantiles are all significantly negative at the 10% confidence level, indicating that managerial myopia has an obvious inhibitory effect on ESG performance and that this inhibitory effect decreases with the improvement of managerial myopia.

Table 6. Robustness test

Comments 2: Endogeneity: The study uses instrumental variables to address endogeneity, considering other approaches for comparison could be an interesting observation (However, this is not necessary at this point)

Response 2: Thank you for pointing this out. Because the instrumental variable method can solve the four cases that violate the classical linear regression assumption, such as omitted variables, sample selection, bidirectional causality and measurement error, this paper mainly uses the instrumental variable method to solve the endogeneity problem. At the same time, in order to alleviate the interference of heteroscedasticity on the research conclusion, this paper adopts robust standard error to conduct multiple regression analysis of the variables.