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ESG Performance and Corporate Resilience: An Empirical Analysis Based on the Capital Allocation Efficiency Perspective

Author

Listed:
  • Kedan Wang

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Shanshan Yu

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Mei Mei

    (Institute of Medical Information & Library, Chinese Academy of Medical Sciences, Beijing 100005, China)

  • Xiao Yang

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Geng Peng

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Benfu Lv

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

Abstract

As China transitions from high-speed to high-quality economic development, the concept of sustainable development, particularly environmental, social, and governance (ESG), has emerged as a crucial consideration in corporate decision-making. This study examines the relationship between ESG performance and corporate resilience through the lens of capital allocation efficiency. Employing a fixed-effects model, heterogeneity analysis, and a mediation effect model, we analyzed 4436 A-share listed companies that were rated according to ESG standards by the China Securities Index (CSI) between 2011 and 2021. Our findings suggest that: (1) ESG performance positively impacts corporate resilience. (2) The magnitude of this effect varies based on the ownership structure and industry. Specifically, ESG performance has a more significant influence on non-state-owned companies and manufacturing companies. (3) Improving ESG performance can enhance corporate resilience through three mechanisms: reducing financing costs, improving investment efficiency, and improving operational efficiency.

Suggested Citation

  • Kedan Wang & Shanshan Yu & Mei Mei & Xiao Yang & Geng Peng & Benfu Lv, 2023. "ESG Performance and Corporate Resilience: An Empirical Analysis Based on the Capital Allocation Efficiency Perspective," Sustainability, MDPI, vol. 15(23), pages 1-31, November.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:23:p:16145-:d:1284317
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    References listed on IDEAS

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