Advances in Economics, Management and Political Sciences

- The Open Access Proceedings Series for Conferences


Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 28 , 10 November 2023

Open Access | Article

Is ESG a New Trick for the Chinese Stock Market? An Empirical Analysis of the Relationship Between Corporate ESG and Financial Performance

Xiaoli Zhao * 1
1 Shanghai Soong Ching Ling School

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 28, 1-12
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Xiaoli Zhao. Is ESG a New Trick for the Chinese Stock Market? An Empirical Analysis of the Relationship Between Corporate ESG and Financial Performance. AEMPS (2023) Vol. 28: 1-12. DOI: 10.54254/2754-1169/28/20231269.

Abstract

As an essential indicator to measure corporate financial performance and social responsibility, ESG has been widely used in theory and practice. This paper uses the data of listed companies combined with the least square regression test, a multidimensional empirical test of the impact of ESG on corporate financial performance. The results demonstrate that ESG has a differentiated impact on different financial indicators such as ROA (returns on assets), ROE (returns on equity), and Tobin's Q index, implying that the impact of ESG is relatively complex. Based on this, this paper puts forward some suggestions hoping to provide some references for enterprises to improve their financial performance and promote sustainable development.

Keywords

ESG, financial performance, least squares regression, ROA, ROE, Tobin’s Q

References

1. Tan Y, Zhu Z. The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness[J]. Technology in society, 2022,68:101906.

2. Susec, M., & Sardy, M. (2021). How Different ESG Factors Across Cultures Affect Financial Performance.

3. Alareeni B A, Hamdan A. ESG impact on the performance of US S&P 500-listed firms[J]. Corporate Governance: The International Journal of Business in Society, 2020,20(7):1409-1428.

4. DasGupta R. Financial performance shortfall, ESG controversies, and ESG performance: Evidence from firms around the world[J]. Finance Research Letters, 2022,46:102487.

5. Li, P., Zhou, R., & Xiong, Y. (2020). Can ESG performance affect bond default rate? Evidence from China. Sustainability, 12(7), 2954.

6. ESG should be boiled down to one simple measure: emissions. Retrieved July 21, 2022, from https://www.economist.com/leaders/2022/07/21/esg-should-be-boiled-down-to-one-simple-measure-emissions

7. Amadio, F. (2021). Relationship between ESG score and corporate financial performance: evidence from over 1000 companies in 23 developed countries.

8. Deng, X., & Cheng, X. (2019). Can ESG indices improve the enterprises’ stock market performance?—An empirical study from China. Sustainability, 11(17), 4765.

9. Aouadi A, Marsat S. Do ESG Controversies Matter for Firm Value? Evidence from International Data[J]. Journal of Business Ethics, 2018,151(4):1027-1047.

10. Ionescu, G. H., Firoiu, D., Pirvu, R., & Vilag, R. D. (2019). The impact of ESG factors on market value of companies from travel and tourism industry. Technological and Economic Development of Economy, 25(5), 820-849.

11. Garcia A S, Mendes-Da-Silva W, Orsato R J. Sensitive industries produce better ESG performance: Evidence from emerging markets[J]. Journal of Cleaner Production, 2017,150:135-147.

Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:

1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.

2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.

3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).

Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-077-6
ISBN (Online)
978-1-83558-078-3
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/28/20231269
Copyright
10 November 2023
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated