Blockholding, ownership horizon, and firms' ESG performance

Non-technical summary The research paper studies business sophistication, tax revenue policies, and ESG (Environmental, Social, and Governance) performance across 105 Belt and Road Initiative (BRI) countries spanning from 2013 to 2021. Key insights from the study underscore a positive association between business sophistication and ESG performance. This suggests that organizations leveraging advanced knowledge and innovation are better positioned to implement effective ESG strategies. Moreover, higher tax revenue is linked to better ESG, underlining a commitment to sustainability within the business landscape. Notably, Information, Communication, and Technology (ICT) emerges as a pivotal catalyst in augmenting ESG performance, particularly when integrated with business sophistication and tax revenue mechanisms. Technical summary This study examines the relationship between business sophistication, tax revenue policies, and ESG (Environmental, Social, and Governance) performance in 105 Belt and Road Initiative (BRI) countries from 2013 to 2021, focusing on the moderating role of Information, Communication, and Technology (ICT). Using advanced econometric methods like Two-Stage Least Squares (2SLS), two-step Generalized Method of Moments (GMM), and fixed-effect regression, the research also considers factors such as microfinance institutions, commercial bank financing, and the COVID-19 pandemic. The findings reveal a significant positive link between business sophistication and ESG performance, indicating that companies with advanced knowledge and innovation are more likely to implement successful ESG policies. Higher tax revenue is also positively correlated with ESG improvements, reflecting support for sustainability. ICT is crucial in enhancing ESG performance, especially when combined with business sophistication and tax revenue. Microfinance and commercial banking are vital in promoting ESG practices in BRI countries. Despite a temporary decline in ESG performance due to COVID-19, the study predicts a post-pandemic resurgence, emphasizing the need to foster an innovation culture for sustainable development. Social media summary There is a positive association between business sophistication, tax revenues, microfinance, ICT, and commercial banking, which are key drivers of better ESG performance in BRI countries.

Manuscript type: Research paper Research aims: The study aims to investigate the extent and level of environmental, social and governance (ESG) performance of listed companies in Thailand, and test for the relationship between ESG committees and performance. Design/methodology/approach: Using the top 100 Thai listed companies (364 firm-year observations) from the Stock Exchange of Thailand (SET), the corporate annual reports during 2018 to 2021 are used to collect ESG board committee characteristics, while ESG performance is collected and measured by ESG scores from S&P Capital IQ and Capital IQ Pro databases. Descriptive analysis, correlation matrix, and multiple regression are used to analyse the data. Research findings: The average performance score of ESG in Thailand is 29.52. In addition, there was an increase of ESG performance by the top 100 firms in Thailand during the period under study. There is a significantly positive relationship between independent ESG committees and ESG performance, while dual positions between top management and ESG committees is negatively correlated with ESG performance. Theoretical contribution/originality: The findings of the relationship between ESG committees and performance demonstrates that agency theory can be used to explain the factors influencing ESG performance by Thai listed companies.

Under the leadership of the Communist Party of China (CPC), this study aims to explore the relationship between independent directors who are CPC members and firms' ESG (environmental, social, and governance) performance. We use a sample of 30,629 A-share firms in China for the period 2012–2021. Our main results show that CPC membership among independent directors can significantly improve firms' ESG performance, with board meetings serving as an important mechanism for this effect. We also examine the impact of CPC membership on external supervision, attention levels, “full and strict governance over the Party”, and ownership nature. The influence of independent directors' CPC membership on firms' ESG performance is greater in companies lacking external supervision, those with higher attention levels, and in state-owned enterprises (SOEs).

Over the past decades, the frequency and economic losses from natural disasters have continued to escalate globally. Disasters pose significant challenges to global sustainable economic and social development. As a critical part of the economy, a firm’s ESG performance is a key indicator of sustainability. Whereas the determinants of firms’ ESG (environmental, social, and governance) performance have gained growing attention, limited research focuses on the impact of natural disasters on ESG performance. This paper provides the first empirical study on the short-, medium-, and long-term impacts of natural disasters on firms’ ESG performance through the lensof earthquakes. By exploiting a difference-in-differences approach based on panel data of Chinese listed firms and a dataset of seismic events, this paper shows that earthquakes have a significant positive impact on affected firms’ ESG performance, with short-term positive effects on environmental and social performance and long-term positive effects on social and governance performance. Heterogeneity analysis reveals that the positive effects are more pronounced for state-owned firms, relatively smaller firms, and firms located in cities with frequent earthquake occurrences. This study highlights the distinct temporal effects on different ESG dimensions and provides new insights for policymakers to employ ESG practices to alleviate the negative effects of disasters.

The importance of emerging market multinational enterprises’ (EM-MNEs) social responsibility has been realized in the literature, but how to enhance EM-MNEs’ ESG (Environmental, Social, and Governance) performance in the digital age has attracted limited attention. This article fills this gap by investigating whether EM-MNEs can improve ESG performance through digital transformation among Chinese listed companies. We employ text analysis techniques to measure the degree of digital transformation within MNEs and further construct a fixed-effects (FE) model to investigate the positive influence of digital transformation on EM-MNEs’ ESG performance. Results show that digital transformation within MNEs is positively related to ESG performance and such effect is verified for non-state-owned enterprises but not for state-owned enterprises. We suggest that MNEs with more foreign subsidiaries are more prone to be influenced by the positive effect of digital transformation on ESG performance than MNEs with fewer foreign subsidiaries. Moreover, the Belt and Road Initiative is valuable for MNEs to reap ESG benefits from digital transformation. The findings enrich international business studies by adding the digital economy and ESG to the discussion. Moreover, they provide valuable implications for policymakers and business leaders in emerging markets by delineating strategies for enhancing the ESG performance of EM-MNEs.

Purpose This paper aims to empirically assess the effect of hospitality firms’ digital dynamic capabilities (DDC) on their corporate digital responsibilities (CDR) and the subsequent impact on their environmental, social and governance (ESG) performance. Specifically, it examines how CDR practices shape ESG digitization and performance in the hospitality industry. Design/methodology/approach The authors collect cross-sectional data via the online survey platform, gathering responses from 257 hotel firms across 42 countries and estimate the structural paths using partial least-squares (PLS) structural equation model. To reduce unobserved heterogeneity for robustness, the authors additionally implement finite mixture PLS (FIMIX-PLS), supported by a post hoc power analysis conducted through G*Power. Findings The results indicate that the three elements of DDC – digital sensing, digital seizing and digital reconfiguring – positively affect substantive and symbolic CDR of hospitality firms. Both CDRs simultaneously contribute positively to firms’ ESG digitization, whereas their direct effect on ESG performance is found to be insignificant. Given the positive impact of ESG digitization on ESG performance, this indicates that ESG digitization acts as a mediator, bridging the impact of both CDRs on ESG performance. Thus, DDC elements enhance CDRs, which, in turn, influence ESG performance indirectly through ESG digitization. Research limitations/implications The empirical support for the interconnected relationship between DDC, CDR and ESG performance provides hospitality and tourism managers with the latest understanding of the mechanism by which they can enhance sustainability performance. Originality/value This study addresses a significant gap in the prior literature by investigating how substantive and symbolic CDR practices differently impact ESG outcomes in the hospitality industry. From a dynamic capability perspective, the study integrates the concept of DDC with ESG and highlights their role in enhancing the effectiveness of CDR practices.

To address escalating environmental challenges and the energy crisis, traditional energy companies must initiate green transformations and enhance green innovation. ESG (Environmental, Social, and Governance) performance is vital for gauging enterprises’ sustainable development. Therefore, this study explores the relationship between the ESG performance of traditional energy companies and their extent of green innovation. It aims to investigate whether improving ESG performance can lead to enhanced green innovation within these companies. Therefore, this paper employs a fixed effect model to analyze the impact of ESG performance on green innovation among traditional energy companies, specifically focusing on those listed in the Chinese A-share market from 2013 to 2022. The results indicate that ESG performance significantly promotes green innovation within traditional energy companies. The mechanism test’s findings reveal that ESG performance impacts green innovation via three key pathways: innovation investment, external monitoring, and government subsidies. Furthermore, further analysis reveals that the intense market competition environment positively moderates the effect of ESG performance enhancement on the extent of green innovation. This implies that, by improving their ESG performance, traditional energy companies can enhance their green innovation and green transformation efforts. Moreover, this impact is particularly pronounced among state-owned enterprises.

With the establishment of China’s “dual carbon” target and the promotion of high-quality development strategy, the role of green innovation has become increasingly important. Corporate ESG innovation, as a guiding principle for companies to practice sustainable development and an important signal for evaluating their environmental and social responsibilities as well as corporate governance level, deserves in-depth research on its impact on green innovation performance. This paper empirically analyzes the green innovation effect of corporate ESG (Environmental, Social and Governance) performance using Chinese A-share listed companies as a sample from 2009 to 2021. The research shows that corporate ESG performance can enhance green innovation performance. Mechanism analysis reveals that ESG performance mainly improves green innovation performance by alleviating financing constraints and enhancing human capital. Further research shows that all three sub-dimensions of ESG performance contribute to improving green innovation performance, with the strongest effect observed in corporate governance performance. ESG performance not only enhances strategic green innovation performance and independent green innovation performance but also improves substantial green innovation performance and collaborative green innovation performance. Therefore, the government should improve the ESG information disclosure system, increase support for companies with excellent ESG performance, and improve local talent policies to attract high-quality green innovation talents. Investors should incorporate ESG performance into their decision-making and strengthen the identification and use of ESG information. Companies should formulate ESG strategies, increase relevant investments, prioritize corporate governance improvement, and enhance the quality of ESG information disclosure through various means.

The contradictory impact of ESG performance on corporate competitiveness: Empirical evidence from China's Capital Market

Enhancing corporate ESG (Environmental, Social, and Governance) performance is a critical issue garnering widespread attention across various sectors. This research examines the impact of executives with overseas backgrounds on corporate ESG performance, utilizing a two-way fixed-effects model with data from Chinese A-share listed companies in Shanghai and Shenzhen spanning from 2008 to 2022. The findings indicate that: (ⅰ) executives with overseas backgrounds positively influence corporate ESG performance, with this effect amplifying as the proportion of such executives within the executive team increases; (ⅱ)both internal and external pay gaps significantly positively moderate the relationship between overseas background executives and corporate ESG performance; (ⅲ) the influence of overseas executives on ESG performance is more pronounced in state-owned enterprises, large-scale firms, firms in the eastern region, and those in high-pollution industries. This study expands the understanding of factors affecting corporate ESG performance, offers empirical insights for listed companies aiming to enhance their ESG performance, and provides valuable implications for executive team construction, executive compensation strategies, government talent policies, and the pursuit of high-quality economic development.

PurposeThis study aimed to investigate the role of the country's institutional quality on the environmental, social and governance (ESG) performance of its companies.Design/methodology/approachOver a four-year period (2016–2019), the study examined the ESG performance of 412 organizations situated in 19 countries. ESG performance was the dependent variable, and the independent variables were rule of law, economic freedom, education index and international trade freedom. These factors described the institutional quality of countries in the authors’ study.FindingsThe findings reveal that institutional quality has a major impact on ESG performance. Companies engage in more ESG practices when they operate in countries with greater economic freedom and international trade freedom. The authors corroborated the core assumption of institutional theory (IT), which argues that organizational behavior is determined by the country's institutional setting.Research limitations/implicationsThe findings, like all research, should be interpreted with caution. The authors’ research focused solely on large energy corporations. As a result, the conclusions cannot be applied to small companies or other industries. ESG performance can also be measured using different datasets.Practical implicationsIf managers want their companies to perform better in terms of ESG, the authors recommend that they form a CSR committee and sign the Global Compact. This study may be valuable to international policymakers because they can underline that greater economic freedom, better education and greater international trade freedom all promote higher ESG performance.Originality/valueTo the best of the authors' knowledge, nearly all of research explores the relationship between ESG and financial performance. As a result, this study built on past research by investigating how national aspects affect corporate ESG performance.

Supply Chain Resilience, ESG Performance, and Corporate Growth

This paper analyzes the impact of digital transformation on corporate ESG (environmental, social, and governance) performance based on the dynamic capability theory of enterprises and the stakeholder theory perspective and conducts empirical tests based on the data of Chinese A-share listed companies in Shanghai and Shenzhen from 2009 to 2022. Before, researchers mostly looked at overall ESG performance. This paper, on the other hand, starts by looking at overall ESG performance and then goes on to look at each of the three ESG dimensions (E, S, and G). It then does a subdimensional refinement to see how digital transformation affects the different dimensions of ESG performance and then checks how the company's ability to innovate in green technology affects the subdimension of ESG performance. This paper puts digital transformation and ESG performance in the same analytical framework, and from the perspective of digital transformation, it puts forward targeted insights and suggestions to improve the ESG performance of Chinese enterprises, providing theoretical support and empirical evidence to promote the practice of ESG development in Chinese enterprises.

Purpose This paper examines the multifaceted relationship between firm ESG (environmental, social and governance) performance and innovation outcomes, incorporating a comprehensive set of metrics: innovation volume, technological impact intensity and financial capability. This study aims to explore how ESG performance influences these dimensions of innovation and to provide insights into the strategic value of ESG. Design/methodology/approach Data were collected from multiple sources, including patent databases, financial datasets and ESG repositories, covering a wide range of industries. A series of robust empirical methods, including White robust regression with clustering, Newey–West and Driscoll–Kraay estimations, were used to ensure reliable and consistent results. Findings The findings reveal the dual role of ESG performance in shaping firm innovation. ESG performance is positively associated with innovation volume and financial capability. However, a negative relationship between ESG performance and technological impact intensity highlights that ESG-driven innovations tend to be more specialized and firm-specific, limiting their broader technological influence. Originality/value This paper offers valuable insights into the strategic potential of ESG as a driver of innovation and financial performance. The findings also offer practical guidelines for firms, highlighting the importance of aligning ESG initiatives with innovation strategies to achieve sustainable competitive advantage.

Board governance and ESG performance in Tokyo stock exchange-listed automobile companies: An empirical analysis