Research on the Impact of ESG Performance on Corporate Financial Performance

Fanyi Meng ()
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Fanyi Meng: Beijing Jiaotong University, School of Economics and Management

A chapter in Proceedings of the 2026 6th International Conference on Enterprise Management and Economic Development (ICEMED 2026), 2026, pp 306-318 from Springer

Abstract: Abstract Under increasing global ecological pressure and social equity concerns, ESG has attracted widespread attention. Using Chinese A-share firms listed on the Shanghai and Shenzhen stock exchanges from 2009 to 2024, this study examines ESG performance’s impact on corporate financial performance. Results show a significant positive effect, robust to tests including variable substitution, lagging, quantile regression, PSM, and instrumental variables. Heterogeneity analysis reveals stronger effects in non-state-owned and low-debt enterprises. Mechanism tests indicate that ESG alleviates financing constraints, increases analyst attention, and reduces agency costs, thereby improving financial performance. The paper recommends that enterprises treat ESG as strategic investment, investors recognize its value-creation path, and regulators enhance ESG disclosure systems to promote sustainable development and efficient capital allocation.

Keywords: ESG performance; financial performance; financing constraints; analyst coverage; agency costs; firm heterogeneity (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-719-4_35

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DOI: 10.2991/978-94-6239-719-4_35

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