Does ESG Performance Affect the Enterprise Value of China’s Heavily Polluting Listed Companies?

Yu Zhang, Xiaotong Wang, Wei Guo (), Xinlei Guo, Qisheng Wang and Xin Tan
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Yu Zhang: School of Economics and Management, Qingdao University of Science and Technology, 99 Songling Road, Qingdao 266061, China
Xiaotong Wang: School of Economics and Management, Qingdao University of Science and Technology, 99 Songling Road, Qingdao 266061, China
Wei Guo: School of Economics and Management, Qingdao University of Science and Technology, 99 Songling Road, Qingdao 266061, China
Xinlei Guo: School of Economics and Management, Qingdao University of Science and Technology, 99 Songling Road, Qingdao 266061, China
Qisheng Wang: School of Economics and Management, Inner Mongolia University of Technology, Hohhot 010051, China
Xin Tan: School of Economics and Management, Qingdao University of Science and Technology, 99 Songling Road, Qingdao 266061, China

Sustainability, 2024, vol. 16, issue 7, 1-21

Abstract: This paper investigates the effect of environmental, social, and governance (ESG) performance on the enterprise value of heavily polluting listed companies in China’s Shanghai and Shenzhen A-share markets. The study found that ESG performance helps to improve the corporate value of heavily polluting listed companies, and ESG performance has an impact mechanism effect on the corporate value of heavily polluting listed companies through green technology innovation, financing costs, and internal control; the analysis of heterogeneity is conducted from three different perspectives: resource endowment, ownership nature, and overseas background of senior executives. At the same time, the interaction term ESG × EPU is employed to examine the regulatory effect of economic policy uncertainty Non-state-owned enterprises can enhance their enterprise value more effectively by improving their ESG performance based on the research findings. The ESG performance of heavy polluting enterprises in non-resource-based cities has a more obvious role in promoting corporate value; in companies where executives have overseas backgrounds, ESG performance is more conducive to the improvement of corporate value. The empirical evidence derived from the research findings rationalizes the connection between the of ESG performance and enterprise value in industries with high levels of pollution, as well as the pathway of impact.

Keywords: ESG performance; enterprise value; heavy-pollution industry; green technology innovation; internal control (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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