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Environmental, Social, and Governance Performance and Enterprise Dynamic Financial Behavior: Evidence from Panel Vector Autoregression

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  • Chao Li
  • Mian Wu
  • Wenli Huang

Abstract

This research applies panel vector autoregression method (PVAR) to analyze the annual panel data of Chinese A-share listed companies over the period 2009–2020, to study the relationship between enterprise ESG performance and enterprise dynamic financial behavior, by using Sino-Securities’ ESG performance data. The main findings of the research include: first, there is a positive interaction between investment and ESG performance. Second, financial factors (e.g., cash flow) have a positive effect on ESG performance, while ESG performance has a positive effect to fundamental factors (e.g., sales revenue). The above significant effects are maintained mainly in enterprises with low ESG performance. Third, the sensitivity of investment-cash flow with low ESG performance form is significant.

Suggested Citation

  • Chao Li & Mian Wu & Wenli Huang, 2023. "Environmental, Social, and Governance Performance and Enterprise Dynamic Financial Behavior: Evidence from Panel Vector Autoregression," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(2), pages 281-295, January.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:2:p:281-295
    DOI: 10.1080/1540496X.2022.2096435
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    References listed on IDEAS

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    1. Jiajia Liu & Zhenzhen Ge & Yahan Wang, 2024. "Role of environmental, social, and governance rating data in predicting financial risk and risk management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 260-273, January.

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