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The relationship between heterogeneous institutional investors’ shareholdings and corporate ESG performance: Evidence from China

Author

Listed:
  • Liu, Yang
  • Jin, Xiao Meng
  • Ly, Kim Cuong
  • Mai, Yong

Abstract

Institutional investors are gaining prominence in China. This study focuses on whether they can monitor corporations to better fulfill their social responsibilities. This research examines the relationship between corporations' environmental, social, and governance (ESG) performance and the shareholdings of relevant institutional investors , indicating that these shareholdings positively affect the ESG performance of Chinese companies. Notably, pressure-resistant institutional investors have a greater impact on corporate ESG performance score than pressure-sensitive institutional investors, particularly for private enterprises and for those whose chief executive officers do not serve as general managers. Based on these results, this paper recommends that institutional investors fully account for their ESG performance and social responsibility when selecting investee companies. As such, this heightened awareness will attract more investment and facilitate company growth.

Suggested Citation

  • Liu, Yang & Jin, Xiao Meng & Ly, Kim Cuong & Mai, Yong, 2024. "The relationship between heterogeneous institutional investors’ shareholdings and corporate ESG performance: Evidence from China," Research in International Business and Finance, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002502
    DOI: 10.1016/j.ribaf.2024.102457
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    Keywords

    environmental; social; and governance performance; institutional investors; pressure sensitive; pressure resistant; corporate governance;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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