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The impact of mandatory ESG disclosure on labor share: Evidence from China

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  • Dong, Nanyan
  • Sun, Jingyi
  • Luo, Sicheng
  • Ma, Xin

Abstract

This study examines whether mandatory disclosure of ESG (Environment, Society, and Governance) information affects the labor share of Chinese listed firms. Leveraging China's mandatory ESG disclosure policy in 2008 as a quasi-natural experiment, we find that the mandate significantly increases labor share through enhancing reputational protection motivation and strengthening institutional governance. Furthermore, innovative firms, larger enterprises, and those operating in less competitive industries experience a more pronounced increase in labor share. These findings suggest that mandatory ESG disclosure can alter income distribution within firms and promote greater commitment to economic equity.

Suggested Citation

  • Dong, Nanyan & Sun, Jingyi & Luo, Sicheng & Ma, Xin, 2026. "The impact of mandatory ESG disclosure on labor share: Evidence from China," Global Finance Journal, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:glofin:v:70:y:2026:i:c:s104402832600030x
    DOI: 10.1016/j.gfj.2026.101262
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