The impact of ESG performance on corporate risk-taking: empirical evidence from China

Lihui Du and Nik Hadiyan Nik Azman

Journal of Sustainable Finance & Investment, 2024, vol. 14, issue 4, 745-765

Abstract: Using China’s A-share listed companies from 2011 to 2021 as a research sample, the study analyzes and empirically examines the impact of ESG performance on corporate risk-taking. The results show that ESG performance has a negative association with risk-taking, which is consistent with the ‘stress hypothesis’. Mechanism tests show that ESG performance dampens risk-taking by increasing corporate transparency. Both top management team stability and institutional ownership negatively moderate the inhibitory effect of ESG performance on corporate risk-taking. Further analysis reveals that the inhibitory effect of ESG performance on corporate risk-taking is more prominent in non-state enterprises and financialized enterprises.

Date: 2024
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DOI: 10.1080/20430795.2024.2366179

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