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Recent years have witnessed a growing interest in understanding the impact of environmental, social, and governance (ESG) factors on corporate financial performance. However, the findings are mixed regarding the holistic impact of ESG in the context of Chinese companies. Using the ESG ratings data of SynTao Green Finance from 2010 to 2020, we investigate how a company’s aggregate ESG score affects its financial performance, using a staggered difference-in-differences model. We find that (1) the overall ESG ratings of Chinese companies positively impact their financial performance; (2) the positive effects are achieved through alleviating agency problems, increasing R&D investment, and improving total factor productivity; (3) the effect is stronger in heavily polluting industries and state-owned enterprises; and (4) the larger a company, the more significant the influence of its ESG ratings on its financial performance. Our findings imply that companies should actively promote ESG practices through green production, active participation in social welfare-enhancing activities, and improved corporate governance systems. Moreover, the Chinese government should strongly support ESG practices, improve the ESG information disclosure system, and establish an incentive mechanism for companies’ ESG practices.
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The authors are grateful to the Editor-in-Chief (Professor Elias G. Carayannis) and two anonymous reviewers for their insightful comments that helped improve this paper.
This work was supported by the National Social Science Fund of China (Number: 20BJL020) and the Major Project of National Social Science Fund (Number: 22&ZD117).
Xin Wang, Liping Liang, Mingming Leng, and Xin Fang contributed equally to this work.
School of Economics, Qingdao University, Qingdao No.62, Keda Branch Road, Qingdao, 266100, China
Wei Jiang & Xin Wang
Department of Operations and Risk Management, Faculty of Business, Lingnan University, Tuen Mun, Hong Kong, China
Liping Liang & Mingming Leng
School of Business, Macau University of Science and Technology, Macau, 999078, China
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Jiang, W., Wang, X., Liang, L. et al. ESG Ratings as a Strategic Imperative: Unraveling Their Influence on Corporate Financial Performance in China. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-02303-2
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DOI : https://doi.org/10.1007/s13132-024-02303-2
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PDF | On Jan 1, 2020, Caiyun Ouyang published Literature Review Based on Corporate Performance | Find, read and cite all the research you need on ResearchGate
This literature review synthesized the relevant literature pertaining to the role of organizational culture on business performance in a perspective of the corporate group. The literature review ...
Leadership has been defined as the process of influence and facilitation between leaders and their followers toward mutual goals (Northouse, 2018; Yukl, 2013).Earlier studies have highlighted the role of leadership in enabling organizations to maintain daily operation and achieve superior performance (Fiedler, 1996; Mintzberg, 1973).For example, Rajagopalan and Spreitzer (1997) highlighted the ...
A Review of Corporate Financial Performance Literature: A Mini-Review Approach Keywords. July 2021. July 2021. DOI: 10.46254/AN11.20210713. Conference: Proceedings of the 11th Annual International ...
This literature review synthesized the relevant literature pertaining to the role of organizational culture on business performance in a perspective of the corporate group. The literature review comprised various published sources on the role of organizational culture, such as journals, periodicals, seminal books, and other published materials.
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Institutional ownership, corporate social responsibility and firms performance. The review of the literature suggests that other than cultural, social, legal and financial factors the ownership structure and the internal corporate governance mechanism play a pivotal role in determining the allocation of resources for CSR activities in the firms ...
Corporate Social Responsibility and Environmental Management : a journal focused on the social & environmental accountability of business in the context of sustainability Abstract With many studies on the participation of women in management positions, a systematic review of gender diversity and its impact on the financial performance of ...
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1. Introduction. Corporate culture as an antecedent has received increasing scholarly attention in the finance literature (Outa & Kutubi, Citation 2021; F. Zheng et al., Citation 2021).Scholars have recognized that cultural antecedents are important in driving financial performance of firms (De Mooij & Hofstede, Citation 2010; Reino et al., Citation 2020).
It is one of the serious matters related to the capability of directors of their effects on corporate performance (Song et al., Citation 2020 ... T. H. H., Ntim, C. G., & Malagila, J. K. (2020). Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda. ...
board of directors and the financial performance of the firm. A discussion of previous literature on: (1) corporate governance from an international perspective, (2) the role of the board of directors, (3) the relationship between corporate governance and financial performance, (4) the relationship between board of directors and financial ...
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To shed new light on this issue, we mapped this topic via a systematic review and content analysis of 53 articles identified in the confluence between CSR and financial performance from 1984 to 2021. Our study suggests that CSR directly impacts a company's financial performance, and this impact becomes more significant as the company's ...
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Corporate financial performance is an overview of the company's financial status report over a period of time to figure out how successful and profitable a company is in producing revenue. These indicators include sales growth, profitability (reflected by ratios such as return on investment, return on sales and return on equity), share price, earnings per share, and so forth. The world economy ...
2.2. Ethical leadership, corporate social responsibility, and organizational performance. Corporate social responsibility (CSR) refers to an organization's intention to use policies and actions focused on individuals outside the organization to bring about positive community change besides its profit-making goals (Saha et al., Citation 2020).Though the relationship between ethical leadership ...
Recent years have witnessed a growing interest in understanding the impact of environmental, social, and governance (ESG) factors on corporate financial performance. However, the findings are mixed regarding the holistic impact of ESG in the context of Chinese companies. Using the ESG ratings data of SynTao Green Finance from 2010 to 2020, we investigate how a company's aggregate ESG score ...
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