This study explores the influence of banks' environmental, social, and governance (ESG) performance and country-level risk factors on liquidity creation. Utilizing a distinctive sample of 2103 bank-year observations from 2000 to 2020 in Asia, the study finds that banks' ESG performance exerts a positive impact on bank liquidity creation. Furthermore, this relationship is more prominent in countries with high geopolitical risk and corruption risk and low levels of democratization. To address endogeneity concerns, a two-stage least squares regression is employed using two instrumental variables, and the findings remain robust. These findings have practical implications for banks and policymakers to consider a country's political risk when promoting ESG activities and facilitating liquidity creation.

本研究探讨了银行的环境、社会和治理（ESG）绩效以及国家层面的风险因素对流动性创造的影响。该研究利用 2000 年至 2020 年亚洲 2103 个银行年度观察的独特样本发现，银行的 ESG 绩效对银行流动性创造产生积极影响。此外，这种关系在地缘政治风险和腐败风险较高、民主化水平较低的国家更为突出。为了解决内生性问题，使用两个工具变量进行两阶段最小二乘回归，结果仍然稳健。这些发现对于银行和政策制定者在促进 ESG 活动和促进流动性创造时考虑国家的政治风险具有实际意义。