IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v61y2025i4p1010-1029.html
   My bibliography  Save this article

Geopolitical Risk and Corporate ESG Performance: Evidence from China

Author

Listed:
  • Yicheng Kuai
  • Huixin Wang

Abstract

This study investigates the impact of geopolitical risk (GPR) on corporate ESG performance. Using a large sample of A-share listed firms in China from 2009 to 2020, we find that firms tend to perform better in ESG practice when faced with high GPR. Analyzing the mechanisms, we find that firms engage in ESG more actively during uncertain periods to hedge risk and gain reputation. In addition, we find that the positive impact of GPR on ESG is more prominent for state-owned firms, heavily polluting firms, firms with managers holding strong environmental awareness, and firms located in highly foreign-trade-dependent areas. Finally, we find that corporate ESG practice can alleviate the adverse effects of GPR on a firm’s risk and reputation, and also enhance the interests of relevant stakeholders, thereby affirming the results of the mechanism analysis and the propositions in the stakeholder theory. Our results are robust to alternative GPR and ESG measures and different estimation methods and samples after correcting for endogeneity using an IV approach. This study highlights the value of ESG practice during uncertain periods.

Suggested Citation

  • Yicheng Kuai & Huixin Wang, 2025. "Geopolitical Risk and Corporate ESG Performance: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(4), pages 1010-1029, March.
    • Handle: RePEc:mes:emfitr:v:61:y:2025:i:4:p:1010-1029
    DOI: 10.1080/1540496X.2024.2404176
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2024.2404176
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2024.2404176?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:61:y:2025:i:4:p:1010-1029. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.