The final, formatted version of the article will be published soon.
ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Economics and Management
Volume 13 - 2025 |
doi: 10.3389/fenvs.2025.1507151
The Impact of ESG Performance on the Financial Performance of Companies: Evidence from China's Shanghai and Shenzhen A-Share Listed Companies
Provisionally accepted- George Washington University, Washington, D.C., United States
Corporate ESG performance has emerged as one of the core competencies for sustainable and healthy development, and it is also a significant means of enhancing financial performance. Against this backdrop, this paper utilizes panel data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2009 to 2022 to empirically analyze the impact of corporate ESG performance on financial performance. The study finds that corporate ESG performance significantly promotes its own financial performance, a conclusion that remains valid after a series of endogeneity and robustness tests. Moderating effect tests reveal that financing constraints and corporate innovation focus positively and negatively moderate the relationship between corporate ESG performance and financial performance, respectively. Heterogeneity analysis indicates that the incentive effect of corporate ESG performance on the financial performance of enterprises in the eastern regions, state-owned enterprises, and high-pollution industries is more pronounced. This research provides Chinese evidence for the relationship between ESG and financial performance, which is of significant guidance for promoting corporate sustainable development and investor decision-making.
Keywords: ESG performance, Financial performance, financing constraints, innovation focus, heterogeneity analysis
Received: 07 Oct 2024; Accepted: 23 Jan 2025.
Copyright: © 2025 Zhang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence:
Li-sen Zhang, George Washington University, Washington, D.C., United States
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.