The effect of ESG performance on value creation of strategic alliances

Xi Wang, Huobao Xie, Jingyuan Li and Xiaolong Liu

Research in International Business and Finance, 2025, vol. 79, issue C

Abstract: Using a sample of strategic alliances involving listed companies in China, we investigate whether a firm’s Environmental, Social, and Governance (ESG) performance enhances shareholder value. Our findings indicate that firms with superior ESG performance achieve higher strategic alliance announcement returns. This positive effect is particularly pronounced when the alliance partner is another firm or a research institution, and when the governance structure of the alliance is contractual in nature. Furthermore, we demonstrate that poorer accounting quality and lower external attention both strengthen the impact of ESG performance, suggesting that information and signaling effects are key mechanisms through which ESG performance influences alliance announcement returns. Additionally, our analysis reveals that the effect of ESG performance is especially significant for non-state-owned enterprises and firms operating in heavily polluting industries, indicating that investors place greater importance on ESG practices within these specific contexts. Finally, our extended analysis shows that ESG performance also promotes the long-term value creation of strategic alliances, thereby contributing to sustained shareholder value. Collectively, these results underscore that corporate ESG performance is a critical determinant of strategic alliance value creation. Our study supports the stakeholder value maximization perspective and enriches the existing literature by elucidating the nuanced relationship between ESG practices and shareholder value.

Keywords: ESG; Strategic alliance; Shareholder value; Information effect; Signaling effect (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003496

DOI: 10.1016/j.ribaf.2025.103093

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