State shareholding in privately-owned enterprises and their ESG performance: Evidence from China

Qi Wang, Zhong Ma, Xinyue Wang and Di Wu

Finance Research Letters, 2024, vol. 60, issue C

Abstract: Utilizing Chinese mixed ownership reform that allows state-owned equity to participate in privately-owned enterprises (POEs), we find that ESG performance of POEs is enhanced with increased state shareholding. Mechanism tests demonstrate that state shareholding alleviates agency problems and financial constraints faced by POEs, thereby leading to enhanced ESG performance. Heterogeneity tests show that the positive impact is more salient among POEs with less aggressive business strategies, as well as those operating in monopolistic and lightly polluting industries. Additionally, by separating three individual components of ESG, we find that the positive impact is salient on social (S) and governance (G) performance.

Keywords: State shareholding; ESG performance; Privately-owned enterprises (search for similar items in EconPapers)
JEL-codes: G18 G30 G34 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:60:y:2024:i:c:s1544612323012631

DOI: 10.1016/j.frl.2023.104891

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