IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v32y2024i1p211-226.html
   My bibliography  Save this article

Non‐state shareholder governance and corporate sustainability: Evidence from environmental, social and governance ratings

Author

Listed:
  • Kun Luo
  • Yuanrui Huang
  • Yi Lv

Abstract

We study how non‐state shareholder governance affects the performance of corporate environmental, social and governance (hereinafter ESG). We select all A‐shares state‐owned listed companies on the Shanghai and Shenzhen stock exchanges from 2011 to 2020 as the research sample. We find that non‐state shareholder governance can improve the ESG ratings by improving green innovation and information transparency. Further analysis shows that non‐state shareholder governance has a significant impact on the ESG ratings of polluting industries, high degree of marketization area, and high competitive industries; the enthusiasm of non‐state shareholders to participate in shareholders' meeting has a great impact on the ESG ratings. This research enriches the influence of non‐state shareholder governance and provides channels for state‐owned enterprises to improve ESG ratings. In addition, this article has important practical significance for state‐owned enterprises to deepen reform and strengthen environmental governance.

Suggested Citation

  • Kun Luo & Yuanrui Huang & Yi Lv, 2024. "Non‐state shareholder governance and corporate sustainability: Evidence from environmental, social and governance ratings," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(1), pages 211-226, February.
    • Handle: RePEc:wly:sustdv:v:32:y:2024:i:1:p:211-226
    DOI: 10.1002/sd.2650
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.2650
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.2650?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. Sabri Boubaker & Hind Sami, 2011. "Multiple large shareholders and earnings informativeness," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 10(3), pages 246-266, August.
    2. Guan, Jian & Gao, Zhimin & Tan, Justin & Sun, Weizheng & Shi, Fan, 2021. "Does the mixed ownership reform work? Influence of board chair on performance of state-owned enterprises," Journal of Business Research, Elsevier, vol. 122(C), pages 51-59.
    3. Wang, Wei & Wang, Hua & Wu, Ji (George), 2021. "Mixed ownership reform and corporate tax avoidance: Evidence of Chinese listed firms," Pacific-Basin Finance Journal, Elsevier, vol. 69(C).
    4. Paolo Capelli & Federica Ielasi & Angeloantonio Russo, 2021. "Forecasting volatility by integrating financial risk with environmental, social, and governance risk," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(5), pages 1483-1495, September.
    5. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    6. Justin J. P. Jansen & Frans A. J. Van Den Bosch & Henk W. Volberda, 2006. "Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators," Management Science, INFORMS, vol. 52(11), pages 1661-1674, November.
    7. Zhang, Xiaoqian & Yu, Mingqiang & Chen, Gaoquan, 2020. "Does mixed-ownership reform improve SOEs' innovation? Evidence from state ownership," China Economic Review, Elsevier, vol. 61(C).
    8. Amore, Mario Daniele & Bennedsen, Morten, 2016. "Corporate governance and green innovation," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 54-72.
    9. Giovanna Michelon & Antonio Parbonetti, 2012. "The effect of corporate governance on sustainability disclosure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(3), pages 477-509, August.
    10. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    11. Baker, Edward D. & Boulton, Thomas J. & Braga-Alves, Marcus V. & Morey, Matthew R., 2021. "ESG government risk and international IPO underpricing," Journal of Corporate Finance, Elsevier, vol. 67(C).
    12. Sabri Boubaker & Hind Sami, 2011. "Multiple large shareholders and earnings informativeness," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 10(3), pages 246-266, August.
    13. Nicola Cucari & Salvatore Esposito De Falco & Beatrice Orlando, 2018. "Diversity of Board of Directors and Environmental Social Governance: Evidence from Italian Listed Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(3), pages 250-266, May.
    14. Robert M. Bushman & Joseph D. Piotroski & Abbie J. Smith, 2004. "What Determines Corporate Transparency?," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 207-252, May.
    15. Luo, Kun & Lim, Edwin KiaYang & Qu, Wen & Zhang, Xuan, 2021. "Board cultural diversity, government intervention and corporate innovation effectiveness: Evidence from China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(2).
    16. Sabri Boubaker & Hind Sami, 2011. "Multiple large shareholders and earnings informativeness," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 10(3), pages 246-266, August.
    17. Sabri Boubaker & Hind Sami, 2011. "Multiple Large Shareholders and Earnings Informativeness," Post-Print hal-01155623, HAL.
    18. Yu, Zhen & Shen, Yiran & Jiang, Shengjun, 2022. "The effects of corporate governance uncertainty on state-owned enterprises' green innovation in China: Perspective from the participation of non-state-owned shareholders," Energy Economics, Elsevier, vol. 115(C).
    19. Li Liu & Lei Du & Xing Liu, 2023. "Lessons from failure: Pollution blacklisting and firm's green innovation," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 483-491, February.
    20. Qihang Xue & Huimin Wang & Caiquan Bai, 2023. "Local green finance policies and corporate ESG performance," International Review of Finance, International Review of Finance Ltd., vol. 23(4), pages 721-749, December.
    21. Kun Luo & Sirui Wu, 2022. "Corporate sustainability and analysts' earnings forecast accuracy: Evidence from environmental, social and governance ratings," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1465-1481, September.
    22. Dong, Rui & Fisman, Raymond & Wang, Yongxiang & Xu, Nianhang, 2021. "Air pollution, affect, and forecasting bias: Evidence from Chinese financial analysts," Journal of Financial Economics, Elsevier, vol. 139(3), pages 971-984.
    23. Duo Shang & Dongliang Yuan & Dehui Li & Libo Fan, 2022. "The Effects of Nonstate Shareholder on the Excess Perquisites: Evidence from Chinese Mixed Ownership Reform," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(14), pages 4001-4013, November.
    24. Altamuro, Jennifer & Beatty, Anne, 2010. "How does internal control regulation affect financial reporting?," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 58-74, February.
    25. Iman Harymawan & Mohammad Nasih & Dian Agustia & Fajar Kristanto Gautama Putra & Hadrian Geri Djajadikerta, 2022. "Investment efficiency and environmental, social, and governance reporting: Perspective from corporate integration management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1186-1202, September.
    26. Berzins, Janis & Bøhren, Øyvind & Stacescu, Bogdan, 2019. "Dividends and taxes: The moderating role of agency conflicts," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 583-604.
    27. Megginson, William L. & Ullah, Barkat & Wei, Zuobao, 2014. "State ownership, soft-budget constraints, and cash holdings: Evidence from China’s privatized firms," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 276-291.
    28. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2017. "The role of board gender and foreign ownership in the CSR performance of Chinese listed firms," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 75-99.
    29. Du, Xingqiang & Jian, Wei & Lai, Shaojuan, 2017. "Do Foreign Directors Mitigate Earnings Management? Evidence From China," The International Journal of Accounting, Elsevier, vol. 52(2), pages 142-177.
    30. Li, Lixing, 2008. "Employment burden, government ownership and soft budget constraints: Evidence from a Chinese enterprise survey," China Economic Review, Elsevier, vol. 19(2), pages 215-229, June.
    31. Abdulsamad Alazzani & Wan Nordin Wan-Hussin & Michael Jones & Ahmed Al-hadi, 2021. "ESG Reporting and Analysts’ Recommendations in GCC: The Moderation Role of Royal Family Directors," JRFM, MDPI, vol. 14(2), pages 1-21, February.
    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. Tian, Zongtao & Chen, Zhibin & Chang, Xinxue, 2024. "Directors appointed by non-state shareholders and stock price synchronicity: Evidence from Chinese SOEs," Journal of Multinational Financial Management, Elsevier, vol. 76(C).
    2. Kun Luo & Sirui Wu, 2022. "Corporate sustainability and analysts' earnings forecast accuracy: Evidence from environmental, social and governance ratings," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1465-1481, September.
    3. Xiaoyang Zhao & Su Yu, 2024. "Does business strategy of the state‐owned enterprise affect the participation of non‐state‐owned capital?: Empirical evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(2), pages 795-808, March.
    4. Li, Wencong & Yang, Xingquan & Yin, Xingqiang, 2022. "Non-state shareholders entering of state-owned enterprises and equity mispricing: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 84(C).
    5. Wang, Wei & Wang, Hua & Wu, Ji (George), 2021. "Mixed ownership reform and corporate tax avoidance: Evidence of Chinese listed firms," Pacific-Basin Finance Journal, Elsevier, vol. 69(C).
    6. Liansheng Wu & Jason Xiao, 2023. "Special Issue On Accounting, Auditing, And Corporate Governance In China," Abacus, Accounting Foundation, University of Sydney, vol. 59(1), pages 1-5, March.
    7. Rongli Yuan & Yadong Han & Zhanliao Chen, 2023. "Multiple Large Shareholders and Financial Reporting Quality: Evidence from China," Abacus, Accounting Foundation, University of Sydney, vol. 59(1), pages 197-229, March.
    8. Wang, He-tong & Qi, Shao-zhou & Li, Kai, 2023. "Impact of risk-taking on enterprise value under extreme temperature: From the perspectives of external and internal governance," Journal of Asian Economics, Elsevier, vol. 84(C).
    9. Liu, Xiaojie & Shen, Jim Huangnan & Deng, Kent, 2022. "Endowment Structure, property rights and reforms of large state-owned enterprises (SOEs) in China: Past, present and future," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 675-692.
    10. Zhang, Yufei & Liu, Deqiang, 2024. "China's mixed-ownership reform and SOE profitability," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 496-520.
    11. Wang, Jinbo & Ran, Maosheng & Huang, Qing & Li, Wanli, 2022. "Nationalization of private enterprises and default risk: Evidence from mixed-ownership reform in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 534-553.
    12. Qian, Shuitu & Yu, Wenzhe, 2024. "Green finance and environmental, social, and governance performance," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1185-1202.
    13. Chen, Yuhuilin & Yuan, Ruizhi & Guo, Xinran & Ni, Tao, 2024. "Do foreign acquisitions improve target firms’ green innovation performance?," International Review of Economics & Finance, Elsevier, vol. 95(C).
    14. Yan, Lina & Ling, Xuan & Wang, Zhitao & Xu, Yinuo, 2023. "Can mixed-ownership reform boost the digital transformation of state-owned enterprises?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 647-663.
    15. Zhang, Shuang & Wang, Wenzhi & Zhou, Liying, 2024. "Nonstate capital participation and innovation in state-owned enterprises: Scale, structure and quality," Finance Research Letters, Elsevier, vol. 61(C).
    16. Elisa Menicucci & Guido Paolucci, 2022. "Board Diversity and ESG Performance: Evidence from the Italian Banking Sector," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
    17. Le Luo & Qingliang Tang, 2021. "Corporate governance and carbon performance: role of carbon strategy and awareness of climate risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2891-2934, June.
    18. Shahbaz, Muhammad & Karaman, Abdullah S. & Kilic, Merve & Uyar, Ali, 2020. "Board attributes, CSR engagement, and corporate performance: What is the nexus in the energy sector?," Energy Policy, Elsevier, vol. 143(C).
    19. Xu, Jingchang & Zhang, Huixuan & Wu, Wuqing, 2023. "One novel mixed ownership reform and green innovation in private firms: Evidence from China," Emerging Markets Review, Elsevier, vol. 57(C).
    20. Francesca Bernini & Fabio La Rosa, 2024. "Research in the greenwashing field: concepts, theories, and potential impacts on economic and social value," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 405-444, June.

    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:wly:sustdv:v:32:y:2024:i:1:p:211-226. 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    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.