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ESG performance and corporate financialization: A dual perspective of risk management and value creation

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  • Gao, Chengyin
  • Zhang, Shujun

Abstract

This paper explores the link between corporate ESG performance and financialization using a sample of publicly listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2022. Baseline regression results indicate that engaging in ESG practices can effectively curb tendencies towards financialization, achieved through enhanced corporate risk management capabilities. Mechanism analysis reveals that value creation mitigates the restrictive effect of ESG performance on financialization. Additionally, heterogeneity analysis shows that different policies and levels of technological advancement influence the effectiveness of ESG impacts.

Suggested Citation

  • Gao, Chengyin & Zhang, Shujun, 2025. "ESG performance and corporate financialization: A dual perspective of risk management and value creation," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014715
    DOI: 10.1016/j.frl.2024.106442
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    More about this item

    Keywords

    Corporate financialization; ESG; Risk management; Value creation;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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