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The Impact of ESG Performance on Firm Value: The Moderating Role of Ownership Structure

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  • Shiyu Wu

    (ANU College of Business and Economics, Australian National University, Canberra, ACT 2600, Australia)

  • Xinyi Li

    (ANU College of Business and Economics, Australian National University, Canberra, ACT 2600, Australia)

  • Xiaosen Du

    (School of Economics, Henan University, Kaifeng 450046, China)

  • Zexin Li

    (College of Humanities and Development Studies, China Agriculture University, Beijing 100193, China)

Abstract

The purpose of this paper is to investigate the relationship between Environmental, Social and Governance (ESG) performance and firm value of Chinese manufacturing listed companies. The moderating role of ownership structure on the relationship between ESG performance and firm value is also tested. Sino-Securities ESG Rating is adopted in this paper to measure ESG performance and ownership structure is measured in four aspects, which include ownership concentration, equity balances, executive shareholding and institutional investor shareholding. We find that (1) ESG performance is important in improving firm value, (2) executive ownership and institutional ownership positively and significantly affect firm value, while ownership concentration and equity balance have no impact and (3) executive ownership and institutional ownership moderate the link between ESG performance and firm value, whereas the moderating role of ownership concentration and equity balance is not significant. The results of this study contribute to the existing literature on ESG and will aid corporations to enhance firm value through improving ESG performance.

Suggested Citation

  • Shiyu Wu & Xinyi Li & Xiaosen Du & Zexin Li, 2022. "The Impact of ESG Performance on Firm Value: The Moderating Role of Ownership Structure," Sustainability, MDPI, vol. 14(21), pages 1-22, November.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:14507-:d:963651
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    References listed on IDEAS

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    2. Yujuan Wu & Jacquline Tham, 2023. "The Impact of Executive Green Incentives and Top Management Team Characteristics on Corporate Value in China: The Mediating Role of Environment, Social and Government Performance," Sustainability, MDPI, vol. 15(16), pages 1-23, August.
    3. Yan Zhao & Ehsan Elahi & Zainab Khalid & Xuegang Sun & Fang Sun, 2023. "Environmental, Social and Governance Performance: Analysis of CEO Power and Corporate Risk," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
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    7. Yalin Mo & Yuchen Che & Wenqiao Ning, 2023. "Digital Finance Promotes Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    8. Yiqun Duan & Fan Yang & Lin Xiong, 2023. "Environmental, Social, and Governance (ESG) Performance and Firm Value: Evidence from Chinese Manufacturing Firms," Sustainability, MDPI, vol. 15(17), pages 1-24, August.
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