Institutional ownership heterogeneity and ESG performance: Evidence from China

Yizhi Wang, Yongjia Lin, Xiaoqing Fu and Songhe Chen

Finance Research Letters, 2023, vol. 51, issue C

Abstract: This paper examines whether institutional investors affect the environment, social, and governance (ESG) performance of Chinese-listed companies. We show that institutional ownership is significantly and positively related to corporate ESG performance. We further classify institutional investors into four different types, based on investment horizons and business relationships, and find that the positive relationship between institutional ownership and ESG performance is mainly driven by long-term pressure-insensitive institutional investors and short-term pressure-sensitive institutional investors. Further evidence suggests that such an association is especially evident among firms in regions with high levels of economic development and marketization.

Keywords: Institutional ownership heterogeneity; ESG performance; Investment horizon; Business relationship (search for similar items in EconPapers)
JEL-codes: G23 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322006250

DOI: 10.1016/j.frl.2022.103448

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