How does corporate ESG performance affect stock liquidity? Evidence from China

Kai Wang, Tingting Li, Ziyao San and Hao Gao

Pacific-Basin Finance Journal, 2023, vol. 80, issue C

Abstract: This study examines whether and how corporate environmental, social, and governance (ESG) performance is associated with firm's stock liquidity. We find robust evidence that ESG performance statistically and significantly increases firm's stock liquidity. The results of channel tests indicate that ESG performance increases firm's stock liquidity by lowering corporate risk and gaining stakeholders' support. Additionally, we find that the positive effect of corporate ESG performance is driven by all the three dimensions. Collectively, our study highlights the importance of corporate ESG performance and its economic consequences.

Keywords: Corporate sustainability; ESG; Stock liquidity; Capital market; Risk prevention; Stakeholders (search for similar items in EconPapers)
JEL-codes: G10 G32 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:80:y:2023:i:c:s0927538x23001531

DOI: 10.1016/j.pacfin.2023.102087

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