A Study of the Correlation between ESG Strategies of Multinational Corporations and Their Market Performance

Abstract

This paper firstly introduces the specific content of ESG strategy, which contains three aspects of environment, society and governance, and effectively measures the sustainability of enterprises through various social factors, as well as the potential risks beyond financial operations. Second, it is hypothesized that the improvement of ESG performance from multinational corporations contributes to the enhancement of corporate value, and that the improvement of ESG performance from non-state-owned multinational corporations contributes more to the enhancement of corporate value compared to state-owned multinational corporations. To verify that the hypothesis is valid, the direct impact of corporate strategic performance on market performance is compared. The results of the analysis show that the logarithm of the amount of OFDI of listed companies and corporate ESG performance show a positive relationship and is more prominent at 10%, with the presence of β=0.099, p<0.01. The ESG strategy of privately owned firms has a figure of 0.149***, which indicates that the ESG strategy performance in the enhancement of corporate value of privately owned firms shows a positive relationship at the 1% significance level. Positive relationship. Therefore, both hypotheses of this paper are valid and are significant in the study of the correlation between ESG strategies of multinational companies and their market performance.