Research on the Influence Mechanism of ESG Performance on Institutional Investors' Shareholding: Empirical evidence from China

Depei Ma; Ao Wang

doi:10.54097/fbem.v9i2.9286

Authors

Depei Ma
Ao Wang

DOI:

https://doi.org/10.54097/fbem.v9i2.9286

Keywords:

ESG performance, Institutional investor shareholding, Business risk, Enterprise value, Media attention, Analyst attention.

Abstract

Since the beginning of the COVID-19 pandemic, the labor force and supply chain have been greatly impacted, the global economy has been in a downturn, and the changes in environmental and social risks have made companies that lack a solid market position or financial foundation suffer great losses. In the new era, institutional investors are in urgent need of judgment criteria other than traditional financial data (such as ESG performance) to ensure that they can select investment projects with high potential and strong anti-risk ability. This paper takes Chinese listed companies from 2010 to 2021 as samples to empirically test the influence mechanism of ESG performance on institutional investors' shareholding. The results show that: (1) ESG performance can significantly promote the shareholding of institutional investors; (2) There is a significant relationship between ESG performance and enterprise internal indicators. Good ESG performance is inversely proportional to business risk and proportional to enterprise value, which reflects the internal economic indicators valued by institutional investors to a certain extent. (3) A good ESG is manifested externally, which significantly promotes the attention of corporate media and analysts, enhances corporate reputation, has a dominant position in public opinion, and increases the shareholding of institutional investors.

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