The impact of corporate financialization on ESG performance: A perspective based on executive incentives

Yafei Xing, Junwei Wang, Zheng Liu and Daibo Xiao

Finance Research Letters, 2025, vol. 76, issue C

Abstract: This study utilizes data from publicly listed companies between 2009 and 2022 as a sample set to investigate how corporate financialization affects corporate ESG performance. The empirical findings suggest that corporate financialization positively contributes to enhancing ESG performance. Executive compensation structures emerge as a moderating variable in the interplay between corporate financialization and ESG performance, with this moderation exhibiting differential impacts on state-owned versus non-state-owned enterprises. Furthermore, the degree of corporate financialization influences ESG performance, revealing a threshold effect as the company's debt-to-asset ratio rises.

Keywords: Corporate financialization; Executive incentives; ESG performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325001989

DOI: 10.1016/j.frl.2025.106934

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