How Does ESG Affect the Stock Prices of Financial Institutions in China?

Abstract

Purpose - As “green growth”, “sustainable development”, and “carbon peaking” frequently come up, research on the environment, society, and corporate governance (ESG) is gradually increasing. This study aims to explore how ESG affects the stock prices of financial institutions through empirical analysis, and how the attention of newspapers, magazines, and online media, as well as the number of shareholders, affect the relationship between the ESG performance and stock prices of financial institutions. Design/Methodology/Approach - This study uses a fixed-effect regression method to conduct an empirical study on the data of financial institutions listed on China’s A-shares from 2015 to 2020. Findings - The research conclusion shows that the better the ESG performance of financial institutions in China, the higher the stock price of financial institutions. At the same time, newspapers and periodicals, online media, and the number of shareholders play a positive regulatory role in the mechanism by which ESG performance promotes stock prices. Research Implications - This article enriches the relevant research in the field of ESG, especially research on the ESG performance and stock price of financial institutions with less research, fills the gaps in research in related fields, and provides a theoretical basis.