The relationship between heterogeneous institutional investors’ shareholdings and corporate ESG performance: Evidence from China

Yang Liu, Xiao Meng Jin, Kim Cuong Ly and Yong Mai

Research in International Business and Finance, 2024, vol. 71, issue C

Abstract: Institutional investors are gaining prominence in China. This study focuses on whether they can monitor corporations to better fulfill their social responsibilities. This research examines the relationship between corporations' environmental, social, and governance (ESG) performance and the shareholdings of relevant institutional investors , indicating that these shareholdings positively affect the ESG performance of Chinese companies. Notably, pressure-resistant institutional investors have a greater impact on corporate ESG performance score than pressure-sensitive institutional investors, particularly for private enterprises and for those whose chief executive officers do not serve as general managers. Based on these results, this paper recommends that institutional investors fully account for their ESG performance and social responsibility when selecting investee companies. As such, this heightened awareness will attract more investment and facilitate company growth.

Keywords: environmental, social, and governance performance; institutional investors; pressure sensitive; pressure resistant; corporate governance (search for similar items in EconPapers)
JEL-codes: D21 M14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002502

DOI: 10.1016/j.ribaf.2024.102457

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