Transformations  in
Business & Economics

DOES ENVIRONMENTAL, SOCIAL, AND GOVERNANCE PERFORMANCE AFFECT CORPORATE ECONOMIC VALUE? EVIDENCE FROM CHINA’S A-SHARE LISTED COMPANIES¹⁴
Xiaobo Fang, Wenyu Zhang, Minoo Ghoreishi

ABSTRACT: In recent years, with the increasing awareness of sustainable development, the environmental, social, and governance (ESG) performance of enterprises has gradually received widespread attention from investors and academics. To explore whether ESG performance affects corporate economics value, using patent data from A-share listed companies in China from 2010-2019, and the methods such as regression analysis, benchmark estimation, and robustness testing, the impact of ESG performance on the corporate economic value added (EVA), and the corresponding influencing mechanisms were analyzed form the perspective of stakeholder theory. Results show that the company’s ESG performance significantly positively affects the company’s economic value. The costs of debt financing and the tax burden play a partial mediation role in the impact of ESG performance on the economic value of the company. The ESG performance of non-state-owned holding companies, non-heavily polluting companies, large companies, and companies in the eastern region has a stronger positive effect on the economic value of the company. An increase in the proportion of female executives, executive age, education level, and tenure significantly increases a company’s ESG performance. Conclusions obtained from this study contribute to the quality of ESG information disclosure in companies.

KEYWORDS:  ESG performance, corporate economic value, debt financing cost, tax burden.

JEL classification:  M14, L25, C12.

¹⁴Acknowledgments:  This study was supported by Henan Provincial Philosophy and Social Science Foundation (No. 2022BJJ091) and Science and Technology Planning Project of Henan Province of China (Soft Science Research) (No. 212400410095).