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Can good ESG performance contribute to corporate common prosperity?

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  • Cai, Yidan
  • Huang, Xinjian

Abstract

Based on the data of China's A-share listed companies from 2010 to 2021, the article examines the impact of ESG performance on common prosperity at the micro level, and finds that corporate ESG performance can significantly increase the value creation of enterprises and share of employees' value. It can realize the “bigger cake” and “better cake” of common prosperity at the same time. This conclusion is still valid after a series of robustness tests. The results of the mechanism test indicate that the alleviation of financing constraints, the improvement of corporate reputation and employment creation are important channels through which corporate ESG performance contributes to the realization of common prosperity. Heterogeneity analysis reveals that the effect of corporate ESG performance on value creation and employee value share is more pronounced for firms that are not key pollution monitoring units, are located in the eastern region, and have high information transparency.

Suggested Citation

  • Cai, Yidan & Huang, Xinjian, 2025. "Can good ESG performance contribute to corporate common prosperity?," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006562
    DOI: 10.1016/j.iref.2025.104493
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