Impact of retail shareholders on corporate green transformation: a deep learning analysis

Yaoyao Li, Tianmei Wang, Junyao Wu and Haoming Lin

Applied Economics, 2025, vol. 57, issue 51, 8519-8540

Abstract: The environmental consciousness of retail shareholders is gradually increasing, and their strong green calls may play an important role in corporate green transformation. Using data from Chinese A-share listed companies from 2010 to 2021 as research samples, we employed a LSTM deep learning model to identify questions related to corporate green development posed by retail shareholders on interactive platforms. We investigated the impact of retail shareholders’ green calls on corporate green transformation. The results show that retail shareholders’ green calls can drive corporate green transformation. This is achieved by retail shareholders increasing the pressure perceived by management and reducing management’s short-sighted behaviour. Heterogeneity analysis reveals that when management’s reply is more positive and more readable, management is more likely to drive corporate green transformation. Moreover, when the influence of major shareholders and management is weaker, retail shareholders are more capable of exerting their role in governance. This study provides empirical evidence for retail shareholders to leverage interactive platforms for green governance.

Date: 2025
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DOI: 10.1080/00036846.2024.2399823

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