Can fair competition enhance corporate ESG performance? Evidence from a quasi-natural experiment of China's fair competition review system

Yangqiu Ren, Guoliu Hu and Qing Wan

Finance Research Letters, 2025, vol. 74, issue C

Abstract: A fair market environment is essential for sustainable enterprise practices. Using Chinese A-share listed companies as samples and leveraging the quasi-natural experiment of the implementation of China's Fair Competition Review System (FCRS), this paper explores the impact of administrative monopoly regulation on corporate environmental, social, and governance (ESG) performance. FCRS enhances ESG performance by promoting competition in the product market, optimizing financial allocation, and reducing rent-seeking. Heterogeneity analysis confirms that FCRS's positive influence on ESG performance is primarily observed in non-state-owned enterprises (non-SOEs), polluting industries, and low market-oriented regions. This provides insights into how competition policies affect firms' sustainable practices.

Keywords: Fair competition review system; ESG performance; Administrative monopoly regulation; Competition policy; Rent-seeking (search for similar items in EconPapers)
JEL-codes: D43 K21 M21 O24 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000194

DOI: 10.1016/j.frl.2025.106754

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