ESG performance and corporate financialization: A dual perspective of risk management and value creation

Chengyin Gao and Shujun Zhang

Finance Research Letters, 2025, vol. 71, issue C

Abstract: This paper explores the link between corporate ESG performance and financialization using a sample of publicly listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2022. Baseline regression results indicate that engaging in ESG practices can effectively curb tendencies towards financialization, achieved through enhanced corporate risk management capabilities. Mechanism analysis reveals that value creation mitigates the restrictive effect of ESG performance on financialization. Additionally, heterogeneity analysis shows that different policies and levels of technological advancement influence the effectiveness of ESG impacts.

Keywords: Corporate financialization; ESG; Risk management; Value creation (search for similar items in EconPapers)
JEL-codes: G32 G34 L25 M14 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014715

DOI: 10.1016/j.frl.2024.106442

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