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Monitoring or Collusion? Multiple Large Shareholders and Corporate ESG Performance: Evidence from China

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  • Wang, Liang
  • Qi, Jiahan
  • Zhuang, Hongyu

Abstract

We examine the collusion effects of multiple large shareholders (MLS) on corporate ESG performance. Using a sample of Chinese listed firms for 2010–2020, we find that firms with MLS tend to have lower ESG performance than firms with a single large shareholder. This finding is robust to a series of robustness checks. Our conclusion is consistent with the common-benefit and cost-sharing hypothesis, where MLS shoulder the costs of poor ESG performance with the controlling shareholder and protect their common benefit through free-riding behavior.

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  • Wang, Liang & Qi, Jiahan & Zhuang, Hongyu, 2023. "Monitoring or Collusion? Multiple Large Shareholders and Corporate ESG Performance: Evidence from China," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000478
    DOI: 10.1016/j.frl.2023.103673
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    4. Hao Ding, 2024. "Can common institutional ownership inhibit the formation of zombie firms? Evidence from China," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 38(1), pages 34-56, May.
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    6. Zhijun Lin & Qidi Zhang & Chuyao Deng, 2024. "Multiple Large Shareholders and ESG Performance: Evidence from Shareholder Friction," Sustainability, MDPI, vol. 16(15), pages 1-28, July.
    7. Zhenyu Jiang & Lingshan Hu & Zongjun Wang, 2024. "Better or worse? Revealing the impact of common institutional ownership on annual report readability," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    8. Binbin Yang & Sang Do Park, 2024. "Under the ESG Dome of China," Sustainability, MDPI, vol. 16(16), pages 1-23, August.
    9. Zhang, Yanan & Zhang, Xiaoyu, 2024. "Top management team functional diversity and ESG performance," Finance Research Letters, Elsevier, vol. 63(C).
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    More about this item

    Keywords

    Multiple large shareholders; Corporate ESG performance; Ownership structure; Collusion effect; Cost sharing;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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