The Moderating Effect of ROA on the Relationship between ESG and Firm Value: Evidence from China
1
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This paper investigates the relationship between environmental, social, and governance (ESG) performance and firm value in China, focusing on the moderating effect of return on assets (ROA) as a proxy for financial performance. Analyzing data from listed companies in China’s A-share market spanning 2018 to 2020, we first find that ESG performance is positively associated with firm value. Secondly, we show that this positive association is more pronounced for firms with strong financial performance, suggesting that the market might place less emphasis on ESG performance if financial performance remains subpar. Lastly, our study reveals that the moderating effect of the relationship between ESG performance and firm value is less pronounced for state-owned enterprises (SOEs) than non-SOEs. This phenomenon stems from the perception that SOEs possess greater stability due to government support. Our study highlights the need for firms to balance ESG performance with financial performance.
Abstract
This paper investigates the relationship between environmental, social, and governance (ESG) performance and firm value in China, focusing on the moderating effect of return on assets (ROA) as a proxy for financial performance. Analyzing data from listed companies in China’s A-share market spanning 2018 to 2020, we first find that ESG performance is positively associated with firm value. Secondly, we show that this positive association is more pronounced for firms with strong financial performance, suggesting that the market might place less emphasis on ESG performance if financial performance remains subpar. Lastly, our study reveals that the moderating effect of the relationship between ESG performance and firm value is less pronounced for state-owned enterprises (SOEs) than non-SOEs. This phenomenon stems from the perception that SOEs possess greater stability due to government support. Our study highlights the need for firms to balance ESG performance with financial performance.
참고문헌 (27)
- Artiach, T., "The Determinants of Corporate Sustainability Performance", Accounting and Finance, 50(1), pp.31~51 (2010)
- Bénabou, R., "Individual and Corporate Social Responsibility", Economica, 77(305), pp.1~19 (2010)
- Bhaskaran, R. K., "Environmental, Social and Governance Initiatives and Wealth Creation for Firms : An Empirical Examination", Managerial and Decision Economics, 41(5), pp.710~729 (2020)
- Brown, W. O., "Corporate Philanthropic Practices", Journal of Corporate Finance, 12(5), pp.855~877 (2006)
- Chairani, C., "The Effect of Enterprise Risk Management on Financial Performance and Firm Value : The Role of Environmental, Social and Governance Performance", Meditari Accountancy Research, 29(3), pp.647~670 (2021)
- Chen, S., "Research on the Impact of ESG Quality on Enterprise Value", Value Engineering, (04), pp.130~134 (2023)
- Do Managers Do Good with Other People’s Money?, "Cheng, H.", National Bureau of Economic Research, ~, pp.No. w19432 (2013)
- Cho, W., "Higher Highs and Lower Lows: Investor Valuation of ESG and Financial Performance", Applied Economics Letters, pp.1~6 (2023)
- Deng, X., "Can ESG Indices Improve the Enterprises’ Stock Market Performance? : An Empirical Study from China", Sustainability, 11(17), pp.4765~ (2019)
- Di Giuli, A., "Are Red or Blue Companies More Likely to Go Green? Politics and Corporate Social Responsibility", Journal of Financial Economics, 111(1), pp.158~180 (2014)
- 정무권, "ESG 활동의 효과와 기업의 재무적 특성", 한국증권학회지, 49(5), pp.681~707 (2020), 한국증권학회[DOI]
- Kornai, J., "The Soft Budget Constraint", International Review for Social Sciences, 39(1), pp.3~30 (1986)
- Lin, Y. F., "Policy Burden and Enterprise’s Soft Budgetary Binding : A Case Study from China", Management World, 8(1), pp.81~89 (2004)
- Makni, R., "Causality between Corporate Social Performance and Financial Performance : Evidence from Canadian Firms", Journal of Business Ethics, 89, pp.409~422 (2009)
- Masulis, R. W., "Agency Problems of Corporate Philanthropy", The Review of Financial Studies, 28(2), pp.592~636 (2015)
- Navarro, P., "Why do Corporations Give to Charity?", Journal of Business, 61(1), pp.65~93 (1988)
- Ortas, E., "The Environmental, Social, Governance, and Financial Performance Effects on Companies that Adopt the United Nations Global Compact", Sustainability, 7(2), pp.1932~1956 (2015)
- Schaltegger, S., "The Link between ‘Green’ and Economic Success : Environmental Management as the Crucial Trigger between Environmental and Economic Performance", Journal of Environmental Management, 65(4), pp.339~346 (2002)
- Shen, H. B., "Maturity Mismatch of Investment and Financing of Local State-owned Enterprise : Causes and Countermeasures", Finance & Trade Economics, 40, pp.70~82 (2019)
- Tian, L. H., "State-owned Property Rights, Soft Budget Constraints and Leveraged Governance of Chinese Listed Companies", Management World, 7(4), pp.26~37 (2005)
- Waddock, S. A., "The Corporate Social Performance-Financial Performance Link", Strategic Management Journal, 18(4), pp.303~319 (1997)
- Wang, N., "How do ESG Practices Create Value for Businesses? Research Review and Prospects", Sustainability Accounting, Management and Policy Journal (2023)
- Wong, W. C., "Does ESG Certification Add Firm Value?", Finance Research Letters, 39, pp.101593~ (2021)
- Yoon, B., "Does ESG Performance Enhance Firm Value? Evidence from Korea", Sustainability, 10(10), pp.3635~ (2018)
- Yu, X., "Does ESG Performance Affect Firm Value? Evidence from a New ESG-Scoring Approach for Chinese Enterprises", Sustainability, 14(24), pp.16940~ (2022)
- Zhao, W. D., "Analysis on the Impact of ESG Performance on the Market Capitalization of A-share Listed Companies and its Enlightenments on ‘Double Carbon’", Industrial Technology Innovation, 3, pp.58~72 (2022)
- Zhang, X., "Does it Pay to be Responsible? The Performance of ESG Investing in China", Emerging Markets Finance and Trade, 58(11), pp.3048~3075 (2022)