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Does Institutional Investor Shareholding Enhance Firms’ True ESG Performance? ——A Study Based on Negative ESG Events of Shanghai and Shenzhen A-share Listed Companies

In: Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)

Author

Listed:
  • Guohui Hu

    (Wuhan University of Technology)

  • Qian Cheng

    (Wuhan University of Technology)

Abstract

Investors’ focus on corporate sustainability has fuelled the rapid development of ESG ratings, and many scholars use ESG ratings as a measure of corporate ESG performance. However, there is some controversy about whether ESG ratings based on enterprises’ self-disclosed ESG reports can represent enterprises’ true ESG performance. This paper explores whether institutional investor shareholding improves firms’ true ESG performance from the perspective of firms’ negative ESG events. It is found that institutional investor shareholding can reduce the level of corporate ESG negative events, i.e., improve firms’ true ESG performance. The mechanism study suggests that institutional investor shareholding improves firms’ true ESG performance by alleviating firms’ financing constraints and thus suppressing their strategic ESG behavioural motives.

Suggested Citation

  • Guohui Hu & Qian Cheng, 2025. "Does Institutional Investor Shareholding Enhance Firms’ True ESG Performance? ——A Study Based on Negative ESG Events of Shanghai and Shenzhen A-share Listed Companies," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin & Tomoki Fujii & Xiaodong Lai & Azlina Binti Md Yassin (ed.), Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025), pages 632-638, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-702-1_67
    DOI: 10.2991/978-94-6463-702-1_67
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