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Green investments and their impact on ESG ratings: An evidence from China

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  • Cao, Mingyao
  • Duan, Keyi
  • Ibrahim, Haslindar

Abstract

Green investments and ESG performance have emerged as pivotal catalysts propelling corporations towards markedly more sustainable operations. The present study undertakes an empirical exploration into the nexus between green investments and corporate ESG performance. The study utilizes Linear mixed effect models to unearth a significant positive correlation, predominantly driven by the Environmental and Social aspects of ESG ratings.

Suggested Citation

  • Cao, Mingyao & Duan, Keyi & Ibrahim, Haslindar, 2023. "Green investments and their impact on ESG ratings: An evidence from China," Economics Letters, Elsevier, vol. 232(C).
    • Handle: RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003907
    DOI: 10.1016/j.econlet.2023.111365
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    References listed on IDEAS

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    1. Mingyao Cao & Keyi Duan & Haslindar Ibrahim, 2023. "Local Government Debt and Its Impact on Corporate Underinvestment and ESG Performance: Empirical Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    2. Chen, Zhongfei & Xie, Guanxia, 2022. "ESG disclosure and financial performance: Moderating role of ESG investors," International Review of Financial Analysis, Elsevier, vol. 83(C).
    3. Wong, Jin Boon & Zhang, Qin, 2022. "Stock market reactions to adverse ESG disclosure via media channels," The British Accounting Review, Elsevier, vol. 54(1).
    4. Gil Cohen, 2023. "The impact of ESG risks on corporate value," Review of Quantitative Finance and Accounting, Springer, vol. 60(4), pages 1451-1468, May.
    5. Liu, Liyun & Zhao, Zhenzhi & Zhang, Mingming & Zhou, Dequn, 2022. "Green investment efficiency in the Chinese energy sector: Overinvestment or underinvestment?," Energy Policy, Elsevier, vol. 160(C).
    6. Sun, Yunpeng & Guan, Weimin & Razzaq, Asif & Shahzad, Mohsin & Binh An, Nguyen, 2022. "Transition towards ecological sustainability through fiscal decentralization, renewable energy and green investment in OECD countries," Renewable Energy, Elsevier, vol. 190(C), pages 385-395.
    7. Agliardi, Elettra & Alexopoulos, Thomas & Karvelas, Kleanthis, 2023. "The environmental pillar of ESG and financial performance: A portfolio analysis," Energy Economics, Elsevier, vol. 120(C).
    8. Hu, Yingde & Bai, Wensong & Farrukh, Muhammad & Koo, Chun Kwong, 2023. "How does environmental policy uncertainty influence corporate green investments?," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    9. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Chen, Qi & Li, Menghan, 2024. "Environmental regulatory system reform and corporate ESG ratings: Evidence from China," Economic Modelling, Elsevier, vol. 135(C).
    2. Michele Costa, 2023. "The evaluation of the effects of ESG scores on financial markets," Working Papers wp1189, Dipartimento Scienze Economiche, Universita' di Bologna.

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    More about this item

    Keywords

    Environmental; social; and governance; Green investment; Linear mixed-effects model; ESG rating;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • G3 - Financial Economics - - Corporate Finance and Governance

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