Can ESG Indices Improve the Enterprises’ Stock Market Performance?—An Empirical Study from China

By Xiang Deng, Xiang Cheng. Sustainability, 2019

181 citations recorded by the source corpus.

Environmental, social responsibility, corporate governance (ESG) are increasingly becoming the consensus of enterprises’ development. However, whether the ESG indices of enterprises can improve their performance on stock market is rarely studied. In order to examine the relationship between enterprise’s ESG indices and stock market performance, and to further explore the heterogeneity impact of stock market performance on the enterprises’ ESG indices in different ownership backgrounds, we conducted an empirical analysis based on China’s A-share listed companies. The empirical results show that there is a positive correlation between enterprise’s ESG indices and its stock market performance. Further analysis indicates that, the impact of ESG indices on non-state-owned enterprises is greater than that on state-owned enterprises, and the stock market performance of the secondary industry is much more affected by ESG indices than that of the tertiary industry. Finally, from three aspects including information disclosure, policy protection, transformation and upgrading, recommendations are proposed on the future direction of China’s ecological civilization construction and sustainable development of enterprises.

Subfields: Economics and Econometrics, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/36b228452bd67e0472330016cbd20f34d9e8f51c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Lei Ruan
2. Heng Liu
3. Xiang Deng
4. Xiang Cheng

In Finance

1. Lei Ruan
2. Heng Liu
3. Xiang Deng
4. Xiang Cheng

In Strategy and Management

1. Lei Ruan
2. Heng Liu
3. F. Mango
4. Xiang Deng
5. Xiang Cheng

Citations in the corpus

• FinTech and Sustainable Development: Evidence from China based on P2P Data (2019, background): “Sustainable development has gradually become a universal consensus and an important strategic choice for countries worldwide [1,2].”
• Environmental, Social, Governance Activities and Firm Performance: Evidence from China (2021, methodology): “[18,25,56], this paper controlled the following variables in the model: firm size (Size), financial leverage (Lev), sales growth rate (Growth), market value to book ratio (Mb), whether audited by the big four (Big4), R&D investment (R&D), firm age (Age), and the largest shareholder’s shareholding pr”
• ESG and reputation: The case of sanctioned Italian banks (2020, background): “Deng and Cheng (2019) – on a sample of Chinese listed companies – demonstrate a positive relationship between enterprise's ESG indices and its stock market performance.”