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State-owned shareholders’ participation and environmental, social, and governance performance of private firms: evidence from China

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  • Xingquan Yang
  • Kexin Zhang
  • Pengfei Gao
  • Zheng Yang

Abstract

We investigate the relationship between state-owned shareholders’ participation and the environmental, social, and governance (ESG) performance of private firms. Based on a sample of Chinese private firms between 2009 and 2022, we find that state-owned shareholders’ participation can significantly improve the ESG performance of private firms. Our mechanism tests suggest that state-owned shareholders play a role in improving the ESG performance of private firms through resource support and governance supervision. Moreover, the positive effect of state-owned shareholders’ participation on ESG performance is more significant if private firms have lower carbon emission intensity and in industries with a higher degree of competition. We also find that state-owned shareholders’ participation effectively increases firm value while improving the ESG performance of private firms. Our results are robust after a series of endogenous and robustness tests. The findings of our study enrich the existing research on the economic consequences of state-owned shareholders’ participation in private firms and the factors influencing corporate ESG performance.

Suggested Citation

  • Xingquan Yang & Kexin Zhang & Pengfei Gao & Zheng Yang, 2025. "State-owned shareholders’ participation and environmental, social, and governance performance of private firms: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 57(26), pages 3503-3524, June.
    • Handle: RePEc:taf:applec:v:57:y:2025:i:26:p:3503-3524
    DOI: 10.1080/00036846.2024.2337797
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