The Impact of Environmental, Social, Governance Performance on Enterprise Market Value: Evidence from Chinese A-share Listed Companies

Abstract

This study selects A-share listed companies on the Shanghai and Shenzhen Main Boards in 2024 as the research sample, excluding financial, insurance, and special-type enterprises. Employing cross-sectional regression analysis with descriptive statistics, correlation analysis, and baseline regression analysis, it investigates the effect of Environmental, Social, Governance (ESG) performance on the market value of Chinese A-share listed companies. The findings reveal that neither the comprehensive ESG performance nor its environment, social, and governance sub-dimensions exerts a statistically significant influence on corporate market value. Further analysis indicates that traditional financial metrics remain the primary valuation anchors: enterprise size demonstrates a significant negative correlation with market value, suggesting systemic valuation discounts for large-scale enterprises; the debt-to-asset ratio significantly depresses market value, reflecting how high leverage-induced solvency risks undermine investor confidence; and profitability shows a significant positive correlation with market value, confirming earnings capacity as a crucial determinant of corporate valuation. The conclusions are aiming to provide references for investors, corporate managers, and policymakers while contributing to the theoretical application of ESG in China's capital markets.