 Institutional investor cliques and ESG performance: Evidence from Chinese firmsWenkang Qiu, Cheng Xiang, Chunhong Li and Yinong Chen International Review of Economics & Finance, 2025, vol. 100, issue C Abstract: Using a sample of Chinese firms, we identify groups of coordinated institutional investors (i.e., cliques) based on their common block stakes and study how their coordination shapes the firm's ESG policy. We document that clique ownership shows a robust and causal positive impact on the firm's future ESG performance. Further tests confirm a positive relationship between ESG and firm value in China. Additionally, we find that clique members coordinate their trades, and the coordination enhances their governance via both voice and exit threats. These results suggest that coordination increases institutional investors' governance impact, which improves their portfolio firms' ESG performance. Consistent with this argument, cross-sectional analyses demonstrate that the positive impact of clique ownership on ESG is greater for firms with weaker governance mechanisms or larger ESG motivations. Keywords: Institutional investor cliques; Common ownership; ESG; Coordination; Corporate governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:100:y:2025:i:c:s1059056025002424 DOI: 10.1016/j.iref.2025.104079 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.