Business Groups, Social, and Environmental Performance: A Comparison of China, Hong Kong, and Taiwan

Abstract

This study examines how much business group affiliation matters for environmental, social and governance (ESG) performance of firms in business groups. Comparing a sample of business groups in mainland China, Hong Kong and Taiwan, we show that business group affiliation accounts for between 33-79% of variance in ESG ratings after industry, year and firm effects are controlled for. Secondly, our study shows that the effects of personal and financial connections in business groups’ ESG performance vary considerably between mainland China, Hong Kong and Taiwan.