An empirical study on the relationship between executives' financial background and corporate ESG performance

Junwei Wang, Yafei Xing and Daibo Xiao

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: This study empirically explores the impact of executives' financial background on corporate Environmental, Social, and Governance (ESG) performance, with a particular focus on the mediating effect of corporate financialization. By selecting a sample of non-financial Chinese listed companies from 2008 to 2022, this paper finds a significant negative correlation between executives' financial experience and corporate ESG performance. Notably, corporate financialization plays a crucial mediating role in this relationship. Furthermore, the study also reveals that managerial overconfidence and financial regulation exert significant moderating effects on the link between executives' financial background and ESG performance. Additionally, the results indicate substantial heterogeneity in the impact of executives' financial background on ESG performance, depending on whether the company adopts a dual leadership structure (where the CEO and chairman are held by the same individual) and whether the company issues a standard audit opinion.

Keywords: Corporate financialization; Managerial overconfidence; Executives' financial experience; Corporate ESG performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:102:y:2025:i:c:s1057521925002285

DOI: 10.1016/j.irfa.2025.104141

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