Research Article
Corporate ESG, Investment Efficiency and Financial Performance
@INPROCEEDINGS{10.4108/eai.8-12-2023.2344791, author={Kunkun Lu and Minxue Gong}, title={Corporate ESG, Investment Efficiency and Financial Performance}, proceedings={Proceedings of the 5th Management Science Informatization and Economic Innovation Development Conference, MSIEID 2023, December 8--10, 2023, Guangzhou, China}, publisher={EAI}, proceedings_a={MSIEID}, year={2024}, month={4}, keywords={esg performance; financial performance; investment efficiency; environmental governance disclosure quality}, doi={10.4108/eai.8-12-2023.2344791} }- Kunkun Lu
Minxue Gong
Year: 2024
Corporate ESG, Investment Efficiency and Financial Performance
MSIEID
EAI
DOI: 10.4108/eai.8-12-2023.2344791
Abstract
Environmental, social, and corporate governance (ESG) has become an important source of the corporate risk and can impact a firm's financial performance and profitability. Drawing on ESG and stakeholder theory, our study suggests that ESG enhances corporate financial performance. And investment efficiency has a mediating role in the relationships between ESG and corporate financial performance. Moreover, higher levels of environmental disclosure strengthen the impact of ESG on performance, whereas lower levels of environmental disclosure weaken this relationship. Our predications receive strong support from the results we derive using a longitudinal dataset on Chinese listed firms for the period running from 2009 through 2021. These findings contribute to a more nuanced understanding of the role of ESG in firm performance and provide relevant suggestions for regulators, firms, and investors.