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Can fair competition enhance corporate ESG performance? Evidence from a quasi-natural experiment of China's fair competition review system

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  • Ren, Yangqiu
  • Hu, Guoliu
  • Wan, Qing

Abstract

A fair market environment is essential for sustainable enterprise practices. Using Chinese A-share listed companies as samples and leveraging the quasi-natural experiment of the implementation of China's Fair Competition Review System (FCRS), this paper explores the impact of administrative monopoly regulation on corporate environmental, social, and governance (ESG) performance. FCRS enhances ESG performance by promoting competition in the product market, optimizing financial allocation, and reducing rent-seeking. Heterogeneity analysis confirms that FCRS's positive influence on ESG performance is primarily observed in non-state-owned enterprises (non-SOEs), polluting industries, and low market-oriented regions. This provides insights into how competition policies affect firms' sustainable practices.

Suggested Citation

  • Ren, Yangqiu & Hu, Guoliu & Wan, Qing, 2025. "Can fair competition enhance corporate ESG performance? Evidence from a quasi-natural experiment of China's fair competition review system," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000194
    DOI: 10.1016/j.frl.2025.106754
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    More about this item

    Keywords

    Fair competition review system; ESG performance; Administrative monopoly regulation; Competition policy; Rent-seeking;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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