IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v13y2025i2p48-d1620870.html
   My bibliography  Save this article

Does Ownership Structure Influence the Financial Performance of Chinese Listed Companies? An Analysis of ESG Practices and Accounting-Based Outcomes

Author

Listed:
  • Jiangshan Zhu

    (School of Mathematics and Physics, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China)

  • Rong Li

    (School of Mathematics and Physics, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China)

  • Zixuan Chen

    (Management School, University of Liverpool, Liverpool L69 7ZX, UK)

  • Tiantian Zhang

    (International Business School Suzhou, Xi’an Jiaotong-Liverpool University, 111 Ren’ai Road, Suzhou 215123, China)

Abstract

This study explores the following two aspects: (i) the impact of Environmental, Social, and Governance (ESG) scores and corporate ownership characteristics on the performance of Chinese listed companies, and (ii) whether different ownership characteristics (state-owned, private, foreign) moderate the relationship between ESG participation and corporate performance. By analyzing a comprehensive sample of 4649 listed companies in China, we provide robust evidence that ESG participation and its three pillars (i.e., Environmental, Social, and Governance) can significantly enhance corporate performance, as measured by the accounting-based proxy return on assets (ROA). Moreover, our research findings reveal an important and novel discovery: in the Chinese market, ownership types have significantly different moderating effects on the relationship between ESG and corporate performance. Specifically, compared to state-owned enterprises and private corporations, foreign ownership exhibits a stronger moderating effect in enhancing the positive impact of ESG on ROA, followed by private corporations, while the moderating effect of state-owned enterprises is the weakest. This result provides new perspectives and empirical support on how ESG and ownership structure jointly affect corporate performance, offering references for future related research and policy formulation.

Suggested Citation

  • Jiangshan Zhu & Rong Li & Zixuan Chen & Tiantian Zhang, 2025. "Does Ownership Structure Influence the Financial Performance of Chinese Listed Companies? An Analysis of ESG Practices and Accounting-Based Outcomes," IJFS, MDPI, vol. 13(2), pages 1-29, March.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:2:p:48-:d:1620870
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/13/2/48/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/13/2/48/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shin, Jiyoung & Moon, Jon Jungbien & Kang, Jingoo, 2023. "Where does ESG pay? The role of national culture in moderating the relationship between ESG performance and financial performance," International Business Review, Elsevier, vol. 32(3).
    2. Liu, Min & Guo, Tongji & Ping, Weiying & Luo, Liangqing, 2023. "Sustainability and stability: Will ESG investment reduce the return and volatility spillover effects across the Chinese financial market?," Energy Economics, Elsevier, vol. 121(C).
    3. Ningyue Liu & Don Bredin & Liming Wang & Zhihong Yi, 2014. "Domestic and foreign institutional investors' behavior in China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 728-751, September.
    4. Haoqiang Yuan & Haiyan Luan & Xi Wang, 2024. "The Impact of ESG Rating Events on Corporate Green Technology Innovation under Sustainable Development: Perspectives Based on Informal Environmental Regulation of Social Systems," Sustainability, MDPI, vol. 16(19), pages 1-26, September.
    5. Yoo, Sunbin & Keeley, Alexander Ryota & Managi, Shunsuke, 2021. "Does sustainability activities performance matter during financial crises? Investigating the case of COVID-19," Energy Policy, Elsevier, vol. 155(C).
    6. Tang, Jinghua & Wang, Xiaoming & Liu, Qigui, 2023. "The spillover effect of customers' ESG to suppliers," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    7. Shi, Chunpei & Wei, Yu & Zheng, Yihe & Wang, Zhuo & Wang, Qian, 2024. "Is ESG investment rewarded or just doing good? Evidence from China," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    8. Charles W. L. Hill & Thomas M. Jones, 1992. "Stakeholder‐Agency Theory," Journal of Management Studies, Wiley Blackwell, vol. 29(2), pages 131-154, March.
    9. Shiri Cohen Kaminitz, 2023. "The significance of GDP: a new take on a century-old question," Journal of Economic Methodology, Taylor & Francis Journals, vol. 30(1), pages 1-14, January.
    10. Yang, Xingquan & Zhang, Kexin & Liao, Guanmin & Gao, Pengfei, 2024. "Administrative monopoly and state-owned enterprise innovation: Evidence from the fair competition review system in China," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    11. Caterina De Lucia & Pasquale Pazienza & Mark Bartlett, 2020. "Does Good ESG Lead to Better Financial Performances by Firms? Machine Learning and Logistic Regression Models of Public Enterprises in Europe," Sustainability, MDPI, vol. 12(13), pages 1-29, July.
    12. Silvia Carnini Pulino & Mirella Ciaburri & Barbara Sveva Magnanelli & Luigi Nasta, 2022. "Does ESG Disclosure Influence Firm Performance?," Sustainability, MDPI, vol. 14(13), pages 1-18, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wu Ning & Ummar Faruk Saeed & Angelina Kissiwaa Twum & Abednego Osei, 2024. "Can ESG disclosures promote firms going concern? Evidence from BRICS countries," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3792-3803, September.
    2. Federica Doni & Marco Fiameni, 2024. "Can innovation affect the relationship between Environmental, Social, and Governance issues and financial performance? Empirical evidence from the STOXX200 index," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 546-574, February.
    3. Hoang, Thi Hong Van & Pham, Linh & Nguyen, Thanh Thi Phuong, 2023. "Does country sustainability improve firm ESG reporting transparency? The moderating role of firm industry and CSR engagement," Economic Modelling, Elsevier, vol. 125(C).
    4. Marie, Mohamed & Qi, Baolei & Elgammal, Mohammed & Elnahass, Marwa, 2024. "A more sustainable future: Can politically connected CEOs spur the nexus between ESG performance and firm financial performance?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 96(C).
    5. Anggita Langgeng WIJAYA & Ima Widha RATNASARI, 2023. "The Effect of the Audit Committee on the Firm Value of State-Owned Enterprises in Indonesia: The Mediation Role of Financial Performance," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(6), pages 60-72, June.
    6. Ghafoor, Abdul & Šeho, Mirzet & Sifat, Imtiaz, 2023. "Co-opted board and firm climate change risk," Finance Research Letters, Elsevier, vol. 52(C).
    7. Wang, Xiaoteng & Zhou, Bole & Li, Xiaoling, 2025. "Qualified foreign institutional investors and corporate ESG performance: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 101(C).
    8. Hannah Charlotte Joos, 2019. "Influences on managerial perceptions of stakeholder salience: two decades of research in review," Management Review Quarterly, Springer, vol. 69(1), pages 3-37, February.
    9. Zhou, Taiyun & Liu, Mingxuan & Zhang, Xiyu & Qi, Zheng & Qin, Ni, 2024. "Does institutional ownership affect corporate social responsibility? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 84-98.
    10. Tariq Elrazaz & Ahmed Shaker Samaan & Moataz Elmassri, 2024. "Sustainable development goals: Sustainability reporting challenges in the United Arab Emirates context," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3100-3114, August.
    11. Miao Tian & Shuhuai Li & Xianghan Cao & Guizhou Wang, 2025. "Network Analysis of Volatility Spillovers Between Environmental, Social, and Governance (ESG) Rating Stocks: Evidence from China," Mathematics, MDPI, vol. 13(10), pages 1-20, May.
    12. Massimo Arnone & Carlo Drago & Alberto Costantiello & Angelo Leogrande, 2025. "Political Trust in Italy: How Environmental, Social, and Governance Factors Shape Confidence in Parties," Working Papers hal-04920996, HAL.
    13. Manos, Ronny & Finger, Maya & Boukai, Haim, 2024. "Self-regulation for responsible banking and ESG disclosure scores: Is there a link?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 97(C).
    14. Li, Dengjia & Ma, Chaoqun & Yang, Jinglan & Li, Hao, 2024. "ESG performance and corporate fraud," Finance Research Letters, Elsevier, vol. 62(PB).
    15. Guerini, Mattia & Harting, Philipp & Napoletano, Mauro, 2022. "Governance structure, technical change, and industry competition," Journal of Economic Dynamics and Control, Elsevier, vol. 135(C).
    16. Jose Luis Retolaza & Maite Ruiz & Leire San‐Jose, 2009. "CSR in business start‐ups: an application method for stakeholder engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 16(6), pages 324-336, November.
    17. Adam Arian & John Sands & Stuart Tooley, 2023. "Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors," Sustainability, MDPI, vol. 15(16), pages 1-21, August.
    18. Wu, Shilei & Zhou, Fu-You & Si, Deng-Kui & Hao, Jiawei, 2025. "Does ESG rating policy reduce corporate risk-taking? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    19. Filippo Vitolla & Nicola Raimo & Michele Rubino & Antonello Garzoni, 2019. "How pressure from stakeholders affects integrated reporting quality," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1591-1606, November.
    20. Camélia Radu & Nadia Smaili, 2022. "Alignment Versus Monitoring: An Examination of the Effect of the CSR Committee and CSR-Linked Executive Compensation on CSR Performance," Journal of Business Ethics, Springer, vol. 180(1), pages 145-163, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:13:y:2025:i:2:p:48-:d:1620870. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.