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Exploring the impact of ESG components, CEO characteristics, and organizational themes on downside risk: Insights from Chinese firms

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  • Tang, Chia-Hsien
  • Lee, Yen-Hsien
  • Hsiao, Ming-Chun
  • Liu, Hung-Chun

Abstract

This study explores the impact of Environmental, Social, and Governance (ESG) components, CEO characteristics, and organizational frameworks on the downside risk among Chinese firms. Our results show that higher ESG total/management (risk) scores are generally associated with a decrease (an increase) in downside risk. The Social and Governance elements of ESG relate positively and negatively to downside risk, respectively. CEO traits, such as overseas background and duality, have a positive impact on downside risk, while the age of the CEO exerts the opposite effect. Finally, state-owned companies or those audited by Big 4 accounting firms can mitigate downside risk.

Suggested Citation

  • Tang, Chia-Hsien & Lee, Yen-Hsien & Hsiao, Ming-Chun & Liu, Hung-Chun, 2024. "Exploring the impact of ESG components, CEO characteristics, and organizational themes on downside risk: Insights from Chinese firms," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000783
    DOI: 10.1016/j.frl.2024.105048
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    More about this item

    Keywords

    Downside risk; ESG; Environmental; Social; Governance; CEO characteristics;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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