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State-Owned Equity Participation and Corporations’ ESG Performance in China: The Mediating Role of Top Management Incentives

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  • Ting Qian

    (Economic and Management College, Beijing University of Technology, Beijing 100124, China)

  • Caoyuan Yang

    (Economic and Management College, Beijing University of Technology, Beijing 100124, China)

Abstract

This study examined the unique circumstances surrounding state-owned equity participation in enterprises in China. Specifically, this study examined the impact of state-owned equity participation on the environmental, social, and governance (ESG) performance of enterprises. Focusing on A-share listed firms on the Shanghai and Shenzhen Stock Exchanges, and using data from 2013 to 2021, the results of our empirical testing showed that state-owned equity participation could significantly improve the ESG performance of enterprises, with this conclusion remaining reliable after a series of robustness tests. Top management incentives were a mediating mechanism for state-owned equity participation in enhancing ESG performance. This study also found that when state-owned equity participated in large enterprises, or companies with a high degree of digital transformation, the effect on the ESG performance was greater than in small or medium-sized enterprises, or enterprises with a low level of digital transformation. The findings of this study add to the current body of research on the factors influencing corporate ESG performance, and the impact of state-owned equity on corporate non-financial performance.

Suggested Citation

  • Ting Qian & Caoyuan Yang, 2023. "State-Owned Equity Participation and Corporations’ ESG Performance in China: The Mediating Role of Top Management Incentives," Sustainability, MDPI, vol. 15(15), pages 1-21, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:11507-:d:1202151
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    2. Han, Wei & Wu, Di, 2024. "ESG ratings, business credit acquisition, and corporate value," International Review of Financial Analysis, Elsevier, vol. 95(PA).

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