ESG performance and cross regional investment: Evidence from Chinese listed companies

Xuefeng Wang, Man Tang, Lv Wenya and Lei Xu

Finance Research Letters, 2025, vol. 81, issue C

Abstract: Based on Chinese listed companies data from 2010 to 2022, this article investigates the relationship between corporate ESG performance and cross regional capital flows. We find that better ESG performance significantly promotes companies to establish subsidiaries across regions, but this effect is mainly reflected in non-state-owned enterprises and investment enterprises within the province. Further analysis suggests that the main reason for enterprises to promote cross regional investment may be that better ESG performance increases investor trust and alleviates financing constraints for enterprises. The conclusion of this article is of great significance in promoting cross regional capital flows and facilitating the integration of factor markets.

Keywords: ESG performance; Capital flows across regions; Investor trust; Financing constraints (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325006993

DOI: 10.1016/j.frl.2025.107439

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