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The impact of non-state shareholder governance on state-owned enterprises' ESG performance in China

Author

Listed:
  • Liu, Xuexin
  • Tang, Xiaomeng
  • Kong, Xiaoxu
  • Gao, Jijun
  • Jiang, Lihua

Abstract

This study investigates how mixed ownership reform, through non-state shareholder governance (NSG), affects the ESG performance of state-owned enterprises (SOEs). Using a sample of Chinese A-share listed companies from 2010 to 2020, we find that NSG positively impacts SOEs' ESG performance by enhancing corporate disclosure transparency. Analyst coverage and investor sentiment further amplify this positive relationship by creating favorable conditions for ESG engagement. A detailed analysis reveals that the effect of NSG on ESG performance is stronger when non-state shareholders participate through board director appointments rather than through equity ownership. Additional findings suggest that NSG indirectly boosts SOEs' market value by improving their ESG performance. By examining the underexplored non-economic outcomes of mixed ownership reform, this study offers valuable insights for enhancing SOE governance and promoting ESG practices.

Suggested Citation

  • Liu, Xuexin & Tang, Xiaomeng & Kong, Xiaoxu & Gao, Jijun & Jiang, Lihua, 2026. "The impact of non-state shareholder governance on state-owned enterprises' ESG performance in China," Emerging Markets Review, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:ememar:v:71:y:2026:i:c:s1566014125001827
    DOI: 10.1016/j.ememar.2025.101433
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