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How Does a Regulatory Minority Shareholder Influence the ESG Performance? A Quasi-Natural Experiment

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Listed:
  • Di Song

    (Business School, China University of Political Science and Law, Beijing 100088, China)

  • Canyu Xu

    (Business School, East China University of Science and Technology, Shanghai 200237, China)

  • Zewei Fu

    (Business School, China University of Political Science and Law, Beijing 100088, China)

  • Chao Yang

    (School of Accountancy, Beijing Wuzi University, Beijing 101149, China)

Abstract

Based on China’s newly established Securities Investor Services Center (CSISC), a minority shareholder protection mechanism, we investigated how the CSISC shareholder influences the ESG performance of listed companies. Using a difference-in-differences analysis for a sample of Chinese listed companies during 2013–2017, we found that the pilot reform of CSISC shareholding has a positive influence on the ESG performance of listed companies. We also found that this effect exists in large companies and in companies in non-high-polluting industries. Besides, analysts’ attention, external auditing quality, institutional shareholding, and highly-developed market intermediary and legal systems can strengthen the effect of CSISC shareholding on corporate ESG performance. Our findings inspire regulators in emerging markets to establish suitable mechanisms to protect minority shareholder rights in the long run.

Suggested Citation

  • Di Song & Canyu Xu & Zewei Fu & Chao Yang, 2023. "How Does a Regulatory Minority Shareholder Influence the ESG Performance? A Quasi-Natural Experiment," Sustainability, MDPI, vol. 15(7), pages 1-22, April.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:6277-:d:1117064
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