ESG Performance and Customer Purchase Behavior in China: The Role of Information Exposure on Market Share

The effect of corporate ESG performance on firm competitiveness has attracted growing attention from both regulators and market participants. Most studies explore and interpret this effect from the perspective of supply-side factors such as technological innovation; however, the role of customer-side factors remains underexplored. This exploratory study aims to theoretically and empirically analyze the mediation role of the customer-side factors in the impact of corporate ESG on market share. Based on a review of the literature, we develop a theoretical model linking corporate ESG performance to customer purchase behavior. The derived hypotheses are empirically checked using panel data of Chinese listed companies from 2009 to 2023 using two-way fixed-effect regression, three-step mediation analysis, and Sobel test. The results show that the effect of ESG performance on market share is significantly positive, and this relationship is mediated by three variables: corporate reputation, firm visibility, and market coverage. Therefore, we suggest that (i) the Chinese government should strengthen mandatory ESG disclosure requirements and enhance supervision of ESG rating agencies; (ii) corporations should substantially improve their ESG performance and enhance ESG communication capabilities; (iii) customers should pay more attention to public interest, allowing individual benefits to align with social welfare, thereby achieving a win-win outcome for both customers and corporations.