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Do institutional investors' corporate site visits improve ESG performance? Evidence from China

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  • Jiang, Yahan
  • Wang, Cai
  • Li, Sha
  • Wan, Jing

Abstract

Based on data from a sample of Chinese Shenzhen-listed companies from 2012 to 2020, this paper studies the relationship between institutional investors' corporate site visits and environmental, social, and governance (ESG) performance. We find that the subsequent ESG performance of firms visited by institutional investors is significantly improved. Further analysis shows that institutional investors drive companies to improve ESG levels by improving the quality of corporate accounting information, increasing environmental protection investment, and increasing media attention. We further document that the positive effects of investors' site visits on corporate ESG performance are more pronounced for financially constrained enterprises, enterprises receiving more government grants, and enterprises in highly polluted regions. Overall, these findings suggest that institutional investors' site visits can play a governance role in corporate ESG activities.

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  • Jiang, Yahan & Wang, Cai & Li, Sha & Wan, Jing, 2022. "Do institutional investors' corporate site visits improve ESG performance? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:pacfin:v:76:y:2022:i:c:s0927538x22001792
    DOI: 10.1016/j.pacfin.2022.101884
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    More about this item

    Keywords

    Governance role; Site visits; ESG; Institutional investors;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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