IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0290008.html
   My bibliography  Save this article

Which institutional investors can improve the level of corporate ESG information disclosure?

Author

Listed:
  • Jianye Wang
  • Yubing Ke
  • Huixue Zhang
  • Yusi Cheng

Abstract

The inconsistency of existing findings on the relationship between institutional investors’ shareholdings and the level of corporate Environmental, Social and Governance (ESG) disclosure may lie in the insufficient consideration of the heterogeneity of institutional investors and investee firms. In this paper, from the perspective of institutional investor heterogeneity, we use a two-way fixed effects model to examine the impact of institutional investors on corporate ESG disclosure and the possible mechanism of this impact using a sample of Chinese A-share-listed firms from 2012 to 2020. We show that institutional investor shareholding can improve the level of corporate ESG information disclosure by enhancing auditor supervision and analyst attention to these external supervision. In terms of institutional investor heterogeneity, it is found that independent institutional investors and stable institutional investors play a stronger role in promoting the level of ESG information disclosure. Moreover, the positive net effect of the institutional investors on improving the level of ESG information disclosure is more pronounced in non-heavily polluting industries and state-owned enterprises. This paper enriches the impact of institutional investors’ shareholding on corporate ESG disclosure from a heterogeneity perspective.

Suggested Citation

  • Jianye Wang & Yubing Ke & Huixue Zhang & Yusi Cheng, 2023. "Which institutional investors can improve the level of corporate ESG information disclosure?," PLOS ONE, Public Library of Science, vol. 18(11), pages 1-17, November.
    • Handle: RePEc:plo:pone00:0290008
    DOI: 10.1371/journal.pone.0290008
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0290008
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0290008&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0290008?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
    ---><---

    References listed on IDEAS

    as
    1. Rajna Gibson Brandon & Simon Glossner & Philipp Krueger & Pedro Matos & Tom Steffen, 2022. "Do Responsible Investors Invest Responsibly? [Why and how investors use ESG information: evidence from a global survey]," Review of Finance, European Finance Association, vol. 26(6), pages 1389-1432.
    2. Gaspar, Jose-Miguel & Massa, Massimo & Matos, Pedro, 2005. "Shareholder investment horizons and the market for corporate control," Journal of Financial Economics, Elsevier, vol. 76(1), pages 135-165, April.
    3. Jiang, Yahan & Wang, Cai & Li, Sha & Wan, Jing, 2022. "Do institutional investors' corporate site visits improve ESG performance? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    4. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    5. Wang, Yizhi & Lin, Yongjia & Fu, Xiaoqing & Chen, Songhe, 2023. "Institutional ownership heterogeneity and ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 51(C).
    6. Incheol Kim & Hong Wan & Bin Wang & Tina Yang, 2019. "Institutional Investors and Corporate Environmental, Social, and Governance Policies: Evidence from Toxics Release Data," Management Science, INFORMS, vol. 65(10), pages 4901-4926, October.
    7. Song Zhu & Haijie Huang & William Bradford, 2022. "The governance role of institutional investors in management compensation: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1015-1063, April.
    8. Guo, Jianan & Islam, Muhammad Azizul & Jain, Ameeta & van Staden, Chris J., 2022. "Civil liberties and social and environmental information transparency: A global investigation of financial institutions," The British Accounting Review, Elsevier, vol. 54(1).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhihao Wang & Kezhi Liao & Sisi Wang, 2024. "Institutional investor horizons, ownership structure and investment efficiency in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(1), pages 739-782, March.
    2. Ashton, John & Wang, Yang & Zhang, Yifei, 2024. "Does mutual fund ownership increase corporate environmental spending?," Journal of Business Research, Elsevier, vol. 184(C).
    3. Hossain, Ashrafee & Masum, Abdullah-Al & Benkraiem, Ramzi, 2024. "Long-term institutional investors and climate change news Beta," Journal of Corporate Finance, Elsevier, vol. 89(C).
    4. Caroline Flammer & Michael W. Toffel & Kala Viswanathan, 2021. "Shareholder activism and firms' voluntary disclosure of climate change risks," Strategic Management Journal, Wiley Blackwell, vol. 42(10), pages 1850-1879, October.
    5. Dasgupta, Amil & Fos, Vyacheslav & Sautner, Zacharias, 2021. "Institutional investors and corporate governance," LSE Research Online Documents on Economics 112114, London School of Economics and Political Science, LSE Library.
    6. Mazur, Mieszko & Salganik-Shoshan, Galla & Walker, Thomas & Wang, Jun, 2018. "Proximity and litigation: Evidence from the geographic location of institutional investors," Journal of Financial Markets, Elsevier, vol. 40(C), pages 60-74.
    7. Kim, Hyun-Dong & Kim, Yura & Mantecon, Tomas & Song, Kyojik Roy, 2019. "Short-term institutional investors and agency costs of debt," Journal of Business Research, Elsevier, vol. 95(C), pages 195-210.
    8. Caselli, Stefano & Gatti, Stefano & Chiarella, Carlo & Gigante, Gimede & Negri, Giulia, 2023. "Do shareholders really matter for firm performance? Evidence from the ownership characteristics of Italian listed companies," International Review of Financial Analysis, Elsevier, vol. 86(C).
    9. Najah Attig & Sean Cleary & Sadok El Ghoul & Omrane Guedhami, 2013. "Institutional Investment Horizons and the Cost of Equity Capital," Financial Management, Financial Management Association International, vol. 42(2), pages 441-477, June.
    10. Mike Burkart & Denis Gromb & Fausto Panunzi, 2006. "Minority Blocks and Takeover Premia," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(1), pages 32-49, March.
    11. Fu, Fanjie & Fang, Jing & Yang, Mei & Yao, Shujie, 2024. "Institutional investor horizons and stock price crash risk," Research in International Business and Finance, Elsevier, vol. 72(PA).
    12. Liang, Jinma & Zhang, Yicheng & Li, Yuanheng, 2024. "The role of ESG scores in ESG fund performance and institutional investor selection," Finance Research Letters, Elsevier, vol. 65(C).
    13. Mihir Tirodkar & Henk Berkman, 2023. "Are polluters shunned? A study on the institutional ownership and returns of polluter stocks," The Financial Review, Eastern Finance Association, vol. 58(3), pages 513-537, August.
    14. Driss, Hamdi & Drobetz, Wolfgang & El Ghoul, Sadok & Guedhami, Omrane, 2021. "Institutional investment horizons, corporate governance, and credit ratings: International evidence," Journal of Corporate Finance, Elsevier, vol. 67(C).
    15. Jun, Xiao & Ai, Junwei & Zheng, Lingfeng & Lu, Meiting & Wang, Jianye, 2024. "Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China," Economic Modelling, Elsevier, vol. 139(C).
    16. Zhang, Lin & Cui, Xiaomeng & Jing, Wei, 2024. "Who are responsible venture capitalists? The effect of business experience," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    17. Cui, Di & Ding, Mingfa & Han, Yikai & Suardi, Sandy, 2022. "Foreign shareholders, relative foreign policy uncertainty and corporate cash holdings," International Review of Financial Analysis, Elsevier, vol. 84(C).
    18. Patrick Velte, 2023. "Which institutional investors drive corporate sustainability? A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 42-71, January.
    19. Huang, Xiaoran & Kang, Jun-Koo, 2017. "Geographic concentration of institutions, corporate governance, and firm value," Journal of Corporate Finance, Elsevier, vol. 47(C), pages 191-218.
    20. Fengguang Lyu & Zhiping Zhang & Guangxin Fu & Zhangxin (Frank) Liu & Sirimon Treepongkaruna, 2024. "Multiple shareholding institutional investors and green governance of heavy‐polluting industries," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3569-3587, May.

    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:plo:pone00:0290008. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.