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The mediating role of investor confidence on ESG performance and firm value: Evidence from Chinese listed firms

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  • Tang, Hua
  • Xiong, Langyu
  • Peng, Ru

Abstract

This study explores how environmental, social and governance (ESG) performance impacts firm value of Chinese listed companies from 2009 to 2022 through external market factors. The analysis indicates that positive ESG performance is beneficial for enhancing investor confidence and thereby enhancing firm value. This positive relationship is more pronounced among eastern enterprises and non-state-owned enterprises. ESG sub items are significantly related to firm value, but the effect size of is different. We conclude that the ESG related activities promotes investor confidence, while the impact of sub item activities on firm value presents different characteristics.

Suggested Citation

  • Tang, Hua & Xiong, Langyu & Peng, Ru, 2024. "The mediating role of investor confidence on ESG performance and firm value: Evidence from Chinese listed firms," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000187
    DOI: 10.1016/j.frl.2024.104988
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    Cited by:

    1. Wang, Ziyuan & Zhang, Cong & Wu, Ran & Sha, Lina, 2024. "From ethics to efficiency: Understanding the interconnected dynamics of ESG performance, financial efficiency, and cash holdings in China," Finance Research Letters, Elsevier, vol. 64(C).
    2. Rahat, Birjees & Nguyen, Pascal, 2024. "The impact of ESG profile on Firm's valuation in emerging markets," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    3. Haoming Ding & Wonhee Lee, 2024. "ESG and Financial Performance of China Firms: The Mediating Role of Export Share and Moderating Role of Carbon Intensity," Sustainability, MDPI, vol. 16(12), pages 1-21, June.

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