Executives’ ESG cognition, ESG responsibility fulfillment, and corporate competitive advantage: Evidence from China

Zhaoguo Zhang, Juan Cheng and Yaqin Xu

Finance Research Letters, 2025, vol. 83, issue C

Abstract: As environmental, social, and governance (ESG) issues gain increasing prominence in global business, the role of executives’ ESG cognition in corporate development has attracted considerable attention. This study examines the impact of executives’ ESG cognition on corporate competitive advantage of non-financial listed companies in China’s capital market. The findings indicate that executives’ ESG cognition significantly enhances corporate competitive advantage by strengthening the fulfillment of corporate ESG responsibilities. Heterogeneity analyses reveal that this positive effect is more pronounced in firms with executive teams that have overseas backgrounds, privately owned companies, and those with higher market attention. This study not only extends the application of upper echelons theory in the ESG domain, but also provides empirical evidence on the role of ESG-oriented leadership in fostering firms' core competencies.

Keywords: Executives’ ESG cognition; ESG responsibility fulfilment; Corporate competitive advantage (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009821

DOI: 10.1016/j.frl.2025.107724

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