Can ESG Indices Improve the Enterprises’ Stock Market Performance?—An Empirical Study from China

Xiang Deng and Xiang Cheng
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Xiang Deng: School of Economics, Sichuan University, No. 24 South Section 1 Yihuan Road, Chengdu 610064, China
Xiang Cheng: School of Economics, Sichuan University, No. 24 South Section 1 Yihuan Road, Chengdu 610064, China

Sustainability, 2019, vol. 11, issue 17, 1-13

Abstract: Environmental, social responsibility, corporate governance (ESG) are increasingly becoming the consensus of enterprises’ development. However, whether the ESG indices of enterprises can improve their performance on stock market is rarely studied. In order to examine the relationship between enterprise’s ESG indices and stock market performance, and to further explore the heterogeneity impact of stock market performance on the enterprises’ ESG indices in different ownership backgrounds, we conducted an empirical analysis based on China’s A-share listed companies. The empirical results show that there is a positive correlation between enterprise’s ESG indices and its stock market performance. Further analysis indicates that, the impact of ESG indices on non-state-owned enterprises is greater than that on state-owned enterprises, and the stock market performance of the secondary industry is much more affected by ESG indices than that of the tertiary industry. Finally, from three aspects including information disclosure, policy protection, transformation and upgrading, recommendations are proposed on the future direction of China’s ecological civilization construction and sustainable development of enterprises.

Keywords: sustainable development; stock market performance; ESG indices (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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