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ESG performance and private enterprise resilience: Evidence from Chinese financial markets

Author

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  • Jin, Shaorong
  • Xiong, Ruoyu
  • Peng, Huan
  • Tang, Shiyu

Abstract

Recently, environmental, social, and governance (ESG) criteria have become increasingly important indicators to measure enterprise sustainability. This study elucidates the impact mechanisms of ESG performance on the resilience of private enterprises by constructing a signaling model. It empirically analyzes how ESG performance affects the resilience of private enterprises based on the data of China's A-share listed private enterprises in Shanghai and Shenzhen from 2009 to 2022. The findings indicate that strong ESG performance significantly improved private enterprise resilience, which remained robust after endogeneity and robustness tests. Analyzing the impact mechanism showed that ESG performance can strengthen the resilience of private enterprises through three channels: attracting institutional investments, procuring government subsidies, and mitigating financing constraints. Heterogeneity analysis shows that the positive impact of ESG performance on the resilience of private enterprises in non-Eastern regions and those with unified leadership (where the Chief Executive Officer also serves as chair) was more significant. The findings enrich relevant research on ESG performance and reveal the functional principle of ESG performance on the resilience of private enterprises. This study provides insights for enterprise managers and government policymakers to enhance private enterprise resilience and sustainability.

Suggested Citation

  • Jin, Shaorong & Xiong, Ruoyu & Peng, Huan & Tang, Shiyu, 2025. "ESG performance and private enterprise resilience: Evidence from Chinese financial markets," International Review of Financial Analysis, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:finana:v:98:y:2025:i:c:s1057521924008160
    DOI: 10.1016/j.irfa.2024.103884
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