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Legal determinants of ESG growth: cross-national evidence from regulatory reforms

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  • Huang, Ruqing
  • Cui, He
  • Sun, Xu

Abstract

This study focuses on the intersection of law and finance, testing the effect of ESG regulatory reforms on firms’ ESG investing growth. Grounded in publicly listed firms in 49 countries, this paper conducts cross-country comparisons and finds a strong positive relation between ESG-related regulatory reforms and firms’ ESG investing. Additionally, we find that regulatory reforms have a greater impact on civil law countries and countries with a higher corruption index. Further analysis uncovers that ESG regulatory reforms lead to higher firm performance. In sum, this paper substantially enriches our knowledge about the drivers of ESG investing from a legal perspective.

Suggested Citation

  • Huang, Ruqing & Cui, He & Sun, Xu, 2025. "Legal determinants of ESG growth: cross-national evidence from regulatory reforms," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016502
    DOI: 10.1016/j.frl.2025.108396
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