The Impact of ESG Performance on Firm Value: The Moderating Role of Ownership Structure

Shiyu Wu, Xinyi Li, Xiaosen Du and Zexin Li ()
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Shiyu Wu: ANU College of Business and Economics, Australian National University, Canberra, ACT 2600, Australia
Xinyi Li: ANU College of Business and Economics, Australian National University, Canberra, ACT 2600, Australia
Xiaosen Du: School of Economics, Henan University, Kaifeng 450046, China
Zexin Li: College of Humanities and Development Studies, China Agriculture University, Beijing 100193, China

Sustainability, 2022, vol. 14, issue 21, 1-22

Abstract: The purpose of this paper is to investigate the relationship between Environmental, Social and Governance (ESG) performance and firm value of Chinese manufacturing listed companies. The moderating role of ownership structure on the relationship between ESG performance and firm value is also tested. Sino-Securities ESG Rating is adopted in this paper to measure ESG performance and ownership structure is measured in four aspects, which include ownership concentration, equity balances, executive shareholding and institutional investor shareholding. We find that (1) ESG performance is important in improving firm value, (2) executive ownership and institutional ownership positively and significantly affect firm value, while ownership concentration and equity balance have no impact and (3) executive ownership and institutional ownership moderate the link between ESG performance and firm value, whereas the moderating role of ownership concentration and equity balance is not significant. The results of this study contribute to the existing literature on ESG and will aid corporations to enhance firm value through improving ESG performance.

Keywords: ESG performance; firm value; ownership concentration; equity balance; executive ownership; institutional ownership; China’s manufacturing sector (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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