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Legal factors driving ESG investment growth: Evidence from cross-border regulatory reforms

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  • Huang, Conghao
  • Mo, Ran

Abstract

Based on panel data from EU countries from 2001 to 2023, this paper evaluates the impact of cross-border regulatory reform on ESG investment growth, focusing on the implementation of the 2014 Non-Financial Reporting Directive (NFRD). By constructing an ESG investment growth indicator system and employing a difference-in-differences model, the study finds that regulatory reform has significantly enhanced ESG investment levels. Robustness checks and the use of instrumental variables confirm the stability and causality of the results. Heterogeneity analysis indicates that the impact of cross-border regulatory reform on ESG investment growth varies significantly among countries with different levels of population aging.

Suggested Citation

  • Huang, Conghao & Mo, Ran, 2025. "Legal factors driving ESG investment growth: Evidence from cross-border regulatory reforms," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325012310
    DOI: 10.1016/j.frl.2025.107973
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    References listed on IDEAS

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