Managing for the future: managerial short-termism impact on corporate ESG performance in China

Guoying Deng, Hanying Liu, Jingzhou Yan and Shibo Ma

The European Journal of Finance, 2025, vol. 31, issue 2, 147-173

Abstract: ESG performance measures the long-term sustainability of a company's development, whereas managerial short-termism cause companies to overly prioritize short-term profits at the expense of neglecting sustainable development. This study on Chinese listed companies from 2009 to 2021 examines the impact of managerial short-termism on corporate ESG performance. We found that managerial short-termism significantly inhibits corporate ESG performance. Furthermore, using text mining of internal and external sentiment data, our findings suggest that companies exhibiting negative sentiment in their annual reports and financial news reports are more susceptible to the detrimental impact of managerial short-termism on corporate ESG performance. In addition, the mechanism analyzes show that managerial short-termism affects corporate ESG performance by lowering R&D investment, reducing the internal ESG attention, declining investor sentiment and increasing financing constraints. The research results revealed that companies managing for the future can better reduce their risk in long-term development.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1351847X.2024.2387622 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:31:y:2025:i:2:p:147-173

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REJF20

DOI: 10.1080/1351847X.2024.2387622

Access Statistics for this article

The European Journal of Finance is currently edited by Chris Adcock

More articles in The European Journal of Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().