The governance of non-state shareholders and corporate ESG: Empirical evidence from China

Does state capital equity affect ESG performance of private firms?—based on the perspective of sustainable development of Chinese enterprises

“…Research directly related to this paper argues that stateowned capital balances the multiple business objectives of economic performance and political responsibility fulfillment and that increased investment by state-owned capital in the environment, society, and governance enhances ESG performance of SOEs, which is partly responsible for the economic inefficiency and lack of competitiveness of China's SOEs (Dewenter and Malatesta, 2001); by contrast, private capital injected into state-owned firms is afterward, as a minority shareholder, more likely to collude with SOE executives in pursuit of short-term financial performance (Cheng et al, 2020), and as shareholding increases, private capital considers the long-term development of the firm, mitigating the potential externalities of management shortsightedness. Therefore, as the amount of private capital injected into SOEs increases, the ESG performance of SOEs becomes "U" shaped (Tian et al, 2023). Such studies provide rich insights into the limits of ESG effects of state-owned capital and sustainable development of private firms and confirm that capital structure changes firms' ESG performance.…”

“…At the macro-level, the methodology of Xin and Xin (2017) and Song et al (2024) was adopted, using the provincial marketization index as a control variable, which included the combined relationship between government and market relationships, the development of the non-public economy, the degree of development of product markets, the degree of development of factor markets, and the development of market intermediary organizations and the legal institutional environment. The index is derived from the Marketization Index of Chinese Provinces-the National Economic Research Institute (NERI) report compiled by Wang et al (2017), which provides the most authoritative information currently available to Chinese scholars to assess the degree of marketization and has been widely used to investigate the external impacts of firms in different situations; in addition, concerning previous studies (Tian et al, 2023;Zhang and Zhao, 2023) at the firm level, this study incorporates firm size (Size), the number of years since listing (Age), the gearing ratio (Lev), the net profit margin of assets (Roa), growth, the proportion of fixed assets (Fixed), the value of Tobinq (TobinQ), the proportion of independent directors (Indep), and whether it is audited by the Big Four (Big4) accounting firms, which are considered to be potentially influential. The specific measurements are shown in Table 1.…”

“…It is important to note that scholars have explored the enterprise state ownership system (Özcan and Beyond, 2020) and ESG performance consequences (Tian et al, 2023) of private capital injection into SOEs. However, they still have to examine the ESG impact of state capital injection on private firms without changing the ownership of the private firms based on this specific perspective.…”

Can green funds improve corporate environmental, social, and governance performance? Evidence from Chinese-listed companies

“…Firstly, it expands the research on the determinants of corporate ESG performance. While previous scholars have explored some factors influencing corporate ESG performance from the perspective of digital financial development [17], digital technological innovation [18], corporate digital transformation [19], managerial attributes [20,21], corporate governance structures [22,23], and government environmental attention [24][25][26], this study aims to investigate the impact of green funds on corporate ESG performance and adds to the factors contributing to corporate ESG performance. Furthermore, it reveals how green funds impact corporate ESG performance through three channels: financial constraints, managerial efficiency, and green innovation.…”