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ESG initiatives and investment efficiency in energy industries: The moderating role of regulation

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  • Cai, Yongyi
  • Xiao, Xuefen
  • Hu, Yanmei

Abstract

Focusing on energy-related industries, this paper aims to test the implications of ESG practices for firm investment efficiency. According to a sample of Chinese energy companies spanning from 2010 to 2024, this paper offers compelling evidence that ESG initiatives greatly improve the investment efficiency of energy firms. In addition, the strength of regulations further amplify the positive relation. Our conclusions remain robust after coping with endogeneity issues and sensitivity checks. Overall, by gaining insights into the financial consequences of ESG behavior, this paper complements the literature on both ESG and corporate investment.

Suggested Citation

  • Cai, Yongyi & Xiao, Xuefen & Hu, Yanmei, 2025. "ESG initiatives and investment efficiency in energy industries: The moderating role of regulation," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016253
    DOI: 10.1016/j.frl.2025.108371
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    References listed on IDEAS

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