ESG performance and corporate value: Analysis from the stakeholders' perspective

Based on the panel data of China's A-share non-financial listed enterprises from 2011 to 2020, we empirically explore whether EGS performance can significantly promote corporate value and how to promote it, from the stakeholders' perspective. We find that: 1) ESG performance significantly improves corporate value. 2) Both media attention and analyst coverage play an intermediary role in the impact of ESG performance on corporate value. 3) Further analysis of the single dimension of ESG illustrates that Environmental (E) and Social (S) have a positive impact on corporate value, but the effect size of Social (S) is smaller, and there is no evidence for a significant relationship between Governance (G) and corporate value. 4) The heterogeneity analysis shows that ESG performance of non-heavily polluting enterprises has a significant positive effect on corporate value, but not on heavily polluting enterprises. Meanwhile, ESG performance of enterprises with a low percentage of institutional investor ownership has a significant positive effect on corporate value, but not with a high percentage. Overall, our study shows that high-quality ESG performance triggers the attention of media and analysts, which in turn promotes corporate value by raising stakeholder pressure. We also analyze the possible causes of heterogeneous results from the perspective of stakeholders, and put forward reasonable suggestions to promote ESG performance and corporate value, as well as protect the interests of stakeholders.

Automated summary

Based on panel data of China's A-share non-financial listed enterprises from 2011 to 2020, this study empirically examines the impact of ESG performance on corporate value from the stakeholders' perspective. The findings suggest that high-quality ESG performance significantly improves corporate value, with both media attention and analyst coverage playing intermediary roles. The analysis of the individual dimensions of ESG reveals that Environmental (E) and Social (S) factors have a positive impact on corporate value, while Governance (G) does not show a significant relationship. Moreover, heterogeneity analysis demonstrates that the effects of ESG performance vary for heavily polluting enterprises and enterprises with different levels of institutional investor ownership.