Does Ownership Structure Influence the Financial Performance of Chinese Listed Companies? An Analysis of ESG Practices and Accounting-Based Outcomes

Jiangshan Zhu, Rong Li (), Zixuan Chen and Tiantian Zhang
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Jiangshan Zhu: School of Mathematics and Physics, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China
Rong Li: School of Mathematics and Physics, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China
Zixuan Chen: Management School, University of Liverpool, Liverpool L69 7ZX, UK
Tiantian Zhang: International Business School Suzhou, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China

IJFS, 2025, vol. 13, issue 2, 1-29

Abstract: This study explores the following two aspects: (i) the impact of Environmental, Social, and Governance (ESG) scores and corporate ownership characteristics on the performance of Chinese listed companies, and (ii) whether different ownership characteristics (state-owned, private, foreign) moderate the relationship between ESG participation and corporate performance. By analyzing a comprehensive sample of 4649 listed companies in China, we provide robust evidence that ESG participation and its three pillars (i.e., Environmental, Social, and Governance) can significantly enhance corporate performance, as measured by the accounting-based proxy return on assets (ROA). Moreover, our research findings reveal an important and novel discovery: in the Chinese market, ownership types have significantly different moderating effects on the relationship between ESG and corporate performance. Specifically, compared to state-owned enterprises and private corporations, foreign ownership exhibits a stronger moderating effect in enhancing the positive impact of ESG on ROA, followed by private corporations, while the moderating effect of state-owned enterprises is the weakest. This result provides new perspectives and empirical support on how ESG and ownership structure jointly affect corporate performance, offering references for future related research and policy formulation.

Keywords: ESG; firm performance; firm ownership (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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