Environmental, Social, Governance Activities and Firm Performance: Evidence from China

Lei Ruan and Heng Liu
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Lei Ruan: Department of Accounting, Northeast Normal University, Changchun 130024, Jilin, China
Heng Liu: Department of Accounting, Northeast Normal University, Changchun 130024, Jilin, China

Sustainability, 2021, vol. 13, issue 2, 1-16

Abstract: Increasingly noticeable environmental and risk problems have made more and more companies and regulatory agencies realize the importance of environmental, social, and governance (ESG) activities. However, on the question that whether ESG activities have promoted or reduced firm performance, there is still no consensus. Especially for China, a representative country in emerging markets whose corporate ESG activities are still in their infancy and related systems and regulatory measures not complete, its theoretical and practical circles more urgently need to know an accurate answer to this question. Therefore, this article takes China’s Shanghai and Shenzhen A-share listed companies that have ESG rating data from 2015 to 2019 as samples and finds that corporate ESG activities have a significantly negative impact on firm performance. Further research finds that compared with state-owned enterprises and environmentally sensitive enterprises, non-state-owned enterprises and non-environmentally sensitive enterprises provide stronger evidence to support the above conclusions.

Keywords: ESG rating; tobin Q; information disclosure; enterprise nature; industry characteristics (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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