Corporate ESG Research Articles

Can enterprise ESG practices ease their financing constraints? Evidence from Chinese listed companies

Under the guidance of the United Nations SDGs target framework, enterprises' ESG practices of developed countries can effectively promote external investors' ESG investment, thus easing enterprises' financing constraints. Using the data of Chinese A-share listed companies in the Shanghai- and Shenzhen-stock exchange markets from 2013 to 2022, this study explores the causal relationship between enterprises' ESG practices and their financing constraints to provide Chinese experience, examines the mediating effect with corporate transparency and investor sentiment, and analyzes the heterogeneity with external auditor type and earnings management motivation. It is found that enterprise ESG practices can enhance their financing ability by improving corporate transparency and suppressing investor sentiment; for the non-Big 4 audit listed companies and the listed companies with the weak motivation of earnings management, the corporate ESG practice has a more significant effect on their financing ability. This study enriches the research on the relationship between ESG practice and ESG financing by providing Chinese evidence.

How AI powers ESG performance in China's digital frontier?

This study investigates the effect of AI on corporate ESG performance using data from Chinese A-share listed firms from 2009–2022. The results indicate that AI enhances corporate R&D investment and the degree of digital transformation, therefore improving ESG performance. The driving effect of AI on ESG performance is more pronounced in firms located in provinces with greater digital financial inclusion. Our findings are robust. This study underscores the importance of AI development in enhancing corporate ESG performance, offering both theoretical support and practical recommendations for establishing a greener and sustainable economic system in China's digital frontier.

Corporate ESG indices and stability during periods of deep concerns in financial markets

This study analyzes the dynamics of the high ESG-score companies' returns reflected in socially responsible indices selected from the FTSE4Good family across the European market during the COVID-19 Pandemic and war in Ukraine. The dynamics of these changes were assessed through the conditional variance derived from Markov Switching ARCH-type models with two regimes. The findings indicate that the effect of market disturbances on the high ESG-score companies from the FTSE4Good Europe index was slightly less persistent than the broad market. Meanwhile, the high ESG-score companies from the FTSE4Good UK index demonstrated similar behavior to their conventional peer, which may be attributed to the composition of the respective index.

Institutional joint shareholding, digital transformation and corporate ESG performance

Based on the data of Shanghai and Shenzhen A-shares from 2008 to 2023, this paper verifies the impact of institutional co-ownership on the ESG performance of enterprises. We find that institutional co-ownership will lead to a decrease in ESG performance, and corporate information transparency plays an intermediary role, resulting in a collusive effect with institutional co-ownership. In addition, digital transformation plays a moderating role, helping to alleviate the inhibitory effect of institutional co-shareholding on ESG performance, and finally turning into a positive promoting effect.

공공기관의 ESG 경영전략과 사회적 책임과의 영향 분석 : 2023년도 공기업과 준정부기관 경영평가 결과를 중심으로

Cmporate social responsibility or ESG is an international trend and is becoming standardized. Public instituticms in Korea have also been evolving into social contnbuticm, social value, and ESG activities, starting with ethical management in the early 2000s. The management evaluation system fur public instituticms is also expanding its evaluation content and weight to include govemmentreconmmded policies, social values, and indicators of social responsibility. Acoording to Werther and Chandler (2011 ), in order to implement corporate social responstbility (CSR) or ESG, companies or public instituticms must establish an integrated, mid-tenn to long-tenn management strategy. Currently, public eoterprises and quasi-govemmeotal organizations in Korea are being criticiz.ed fur eogaging in reactive and passive CSR or ESG activities in accordance with the management evaluation system of the Ministry of Strategy and Finance. Therefore, the public institution management evaluation manual stipulates that CSR or ESG should be promoted at the level of mid-tenn to long-term management strategy, but empirical analysis through the results of management evaluation shows that social responsibility activities rather than ESG management strategy affect management perfurmance. Orlitzky, Schmidt, and Rynes(2003) shows that it is tmre effective as a parameter for financial budget perfurmance than for public oommunicaticm, as shown in the research results. Therefore, looking at the pmpose of the new ''Public Entetprises and Sustainability'' chapter in the May 2024 OECD Public Entetprise Governance Guidelines, it is important for public eoterprises and quasi-govemmmtal organiWinns to improve short-tenn management efficiency and profitability, but it is also important to improve the e:fficieocy and profitability of public eole!prises in the mid-tenn to long-term. This meaos that social responsibility and ESG activities must be promoted at the strategic level of public instituticms for sustainability, and it can be empirically confinu:d that social resporunbility activities and ESG management have an impact on management performance such as financial budget performance.

The Impact of Corporate ESG Performance on Leverage Manipulation Empirical Evidence From A-Share Panel Data of Chinese Listed Companie

ESG stands for Environment (Environment), society (Social) and corporate governance (Government) respectively. It is a non-financial performance investment concept and enterprise evaluation standard, and has been used by enterprises as an important indicator to measure its quality. In the context of "deleveraging", there is a lack of targeted research on whether enterprise ESG performance can help enterprises "healthy" deleveraging. In this paper, the A-share listed companies in Shanghai and Shenzhen stock markets from 2008 to 2022 are selected as the original samples to explore the influence of ESG performance on the degree of leverage manipulation of enterprises. The empirical results show that good ESG performance can significantly reduce the degree of leverage manipulation of smes; In terms of mechanism test, ESG weakens enterprises' leverage manipulation motivation by reducing their own credit level, and enterprises' digital transformation inhibits their own leverage manipulation. Further heterogeneity test shows that ESG performance is better in eastern and central regions and state-owned enterprises. It is suggested that the ESG performance of enterprises should be further optimized and relevant supervision should be strengthened.

The Power of Culture: Business Nationalist Culture and ESG Performance

High-quality development is the theme of China’s economic and social development in the new era, and corporate ESG performance is a comprehensive indicator for evaluating the level of corporate environmental responsibility, social responsibility and governance, as well as an important yardstick for identifying the high-quality development of enterprises. This paper takes Chinese non-financial listed companies from 2011 to 2022 as the research sample and empirically examines the impact of corporate nationalism culture on corporate ESG performance and its mechanism by quantifying corporate nationalism culture using the text of corporate annual reports, natural language processing and text analysis methods. The results of the study show that corporate nationalism culture significantly enhances corporate ESG performance. The mechanism analysis suggests that corporate nationalism culture, as an internal informal system, can play a governance role and promote corporate ESG practices by changing attention allocation and mitigating agency problems. The positive effect of corporate nationalism culture on corporate ESG performance is more pronounced in the grouping of firms with lower institutional investor shareholding, fewer analysts’ attention and embedded party organisations. A heterogeneity analysis reveals that the corporate nationalism culture driving effect on corporate ESG performance is more significant in the subsample of firms with weak financing constraints, in the growth period and in the decline period. This study reveals the positive role of soft cultural factors in enhancing corporate ESG performance, providing useful managerial evidence for companies to integrate ESG concepts at the strategic level for high-quality economic development.

Does environmental protection tax impact corporate ESG greenwashing? A quasi-natural experiment in China

The recently implemented environmental protection tax (EPT) policy in China provides the opportunity to conduct a quasi-natural experiment to empirically evaluate environmental regulations’ impact on corporate practices. We adopt the difference-in-differences method to analyze the effect and mechanisms of the EPT on corporate environmental, social, and governance (ESG) greenwashing based on Chinese A-share listed companies from 2015 to 2021. The empirical results show that the EPT drives companies to engage in ESG greenwashing, significantly increasing ESG greenwashing by approximately 13.16 %. The mechanism tests demonstrate that the EPT exerts governance pressure but does not create more resources, making companies more likely to achieve compliance through greenwashing. Furthermore, the effect of the EPT on ESG greenwashing is more pronounced for large companies and those located in regions with high economic development and strong regulatory enforcement. Our study provides solid evidence with valuable implications for improving the EPT policy to achieve green and sustainable development.

Do tax incentives matter in promoting corporate ESG performance toward sustainable development?

Do tax incentives matter in promoting corporate ESG performance toward sustainable development?

Board Gender Diversity, Corporate Productivity and ESG Performance

This study is based on the two major strategies of new productivity and corporate ESG development, using data from China's A-share listed companies from 2011 to 2022 to empirically test the impact of female directors on corporate ESG performance, and the impact of corporate new productivity development on both. potential role. Research results show that the presence of female directors has a positive effect on improving corporate ESG; the development level of corporate new productivity can strengthen the positive impact of female directors on corporate ESG. In addition, further heterogeneity analysis found that in companies with strong profitability, female directors and corporate new productivity have a more significant role in promoting ESG.

Will Digital Transformation Empower Corporate ESG Performance: Moderated Mediation Analysis through the Prism of Executives’ Foreign Experience

Will Digital Transformation Empower Corporate ESG Performance: Moderated Mediation Analysis through the Prism of Executives’ Foreign Experience

Impact of climate change risks on equity capital: Evidence-based on Chinese markets

The economic consequences of climate change at the enterprise level have received considerable attention. This study examines the positive effects of climate change risk on equity capital costs, which are realized through firms' operational risk, financial constraints, and the government's service environment. A higher corporate ESG rating enhances the positive effect of climate change risk on equity capital costs. We also find that the Paris Agreement has a benign policy effect on equity capital costs. Finally, expanding upon this groundwork, a thorough heterogeneity analysis has been conducted, encompassing three distinct dimensions—enterprise risk system, industry environmental attributes, and operational ecosystem.

The Nonlinear Effects of Digital Finance on Corporate ESG Performance: Evidence from China

Digital finance enhances corporate ESG performance and is essential for achieving sustainable development; however, its consistent effectiveness in improving ESG outcomes remains contested. Using panel data from A-share listed companies on the Shanghai and Shenzhen stock exchanges in China from 2011 to 2021, this study empirically examines nonlinear effects, transmission mechanisms, and moderating factors. The results indicate a U-shaped relationship between digital finance and ESG performance, with a positive impact becoming apparent when digital finance exceeds the threshold of 3.81. Mechanism tests reveal that green technological innovation and public environmental attention are crucial transmission channels for the nonlinear effects. Furthermore, financial regulation levels and environmental uncertainty negatively moderate this relationship, while corporate digital transformation has a positive moderating effect. Further analysis shows that the U-shaped relationship is more pronounced in areas with lesser financial advancement and higher levels of environmental regulation, as well as in non-high-tech industries, non-manufacturing sectors, smaller firms, and companies without political connections. This study provides empirical evidence and policy insights to support the promotion of financial services that better facilitate corporate sustainability.

Government Environmental Information Regulation and Corporate ESG Performance

Government Environmental Information Regulation and Corporate ESG Performance

Fintech development influences on corporate ESG performance: evidences from Southeast Asia

Fintech development influences on corporate ESG performance: evidences from Southeast Asia

“Good medicine is bitter” or “drinking poison to quench thirst”? The impact of maturity mismatch on corporate ESG performance

The maturity mismatch can influence corporate behavior to some extent, so whether they affect corporate ESG performance becomes an issue worthy of attention. This paper verifies maturity mismatch's negative effect on corporate ESG performance. This inhibitory effect acts through governance performance and productive efficiency. Furthermore, the negative impact of maturity mismatch on corporate ESG performance varies heterogeneously with different ownership and financing constraints.

Environmental regulation, digital transformation, and corporate ESG performance: Evidence from the implementation of China's NEPL

This study examines whether China's New Environmental Protection Law (NEPL), implemented in 2015, can improve the ESG performance of heavy polluters. Using A-share listed companies from 2010 to 2020 as our sample, we find that the NEPL significantly enhances ESG performance, especially for non-state-owned and labor-intensive enterprises. Furthermore, the moderating effect of digital transformation within enterprises has facilitated the NEPL's impact on enhancing ESG performance. These findings have important implications for environmental regulation in promoting ESG performance, realizing green transformation, and achieving high-quality and sustainable economic development.

Executives’ green experience and corporate ESG performance: Do government subsidies matter?

This paper innovatively explores the impact of executives’ green experience on corporate environmental, social, and governance (ESG) performance, simultaneously highlights the moderating role of government subsidies. Using data on Chinese listed companies from 2009 to 2022, we find that companies hired executives with green experience perform better in ESG, and the positive effect of executives’ green experience is more pronounced in non-high-tech industries and eastern region. Specifically, education and practice experience both have contribution, and the education experience effects greater. In addition, we reveal the positive moderating role of government subsidies.

Geopolitical Risk and Corporate ESG Performance: Evidence from China

ABSTRACT This study investigates the impact of geopolitical risk (GPR) on corporate ESG performance. Using a large sample of A-share listed firms in China from 2009 to 2020, we find that firms tend to perform better in ESG practice when faced with high GPR. Analyzing the mechanisms, we find that firms engage in ESG more actively during uncertain periods to hedge risk and gain reputation. In addition, we find that the positive impact of GPR on ESG is more prominent for state-owned firms, heavily polluting firms, firms with managers holding strong environmental awareness, and firms located in highly foreign-trade-dependent areas. Finally, we find that corporate ESG practice can alleviate the adverse effects of GPR on a firm’s risk and reputation, and also enhance the interests of relevant stakeholders, thereby affirming the results of the mechanism analysis and the propositions in the stakeholder theory. Our results are robust to alternative GPR and ESG measures and different estimation methods and samples after correcting for endogeneity using an IV approach. This study highlights the value of ESG practice during uncertain periods.

Global geopolitical risk and corporate ESG performance

This study investigates whether and how the global geopolitical risk (GPR) impacts the environmental, social, and governance (ESG) performance of Chinese enterprises utilizing panel data of Chinese A-share listed enterprises from 2011 to 2020. The findings show that enterprises' ESG performance is negatively impacted by the global GPR. According to heterogeneity analysis, the global GPR has a more detrimental effect on ESG performance in non-state-owned enterprises, enterprises in the decline period, enterprises with higher institutional investor shareholdings, and enterprises without political connections. Additional mechanism analysis reveals that global GPR primarily weakens Chinese enterprises' ESG performance by increasing their financing constraints and reducing competitiveness. . In conclusion, our main findings are still valid after addressing endogeneity-related concerns and doing robustness tests.