An Empirical Analysis of the Impact of ESG on the Financial Performance of Chinese Manufacturing Firms in the Post-Pandemic Era

Yijie Ji

doi:10.54097/pj9hd076

Authors

Yijie Ji College of Management and Economics, Tianjin University, Tianjin, China

DOI:

https://doi.org/10.54097/pj9hd076

Keywords:

ESG, Financial performance, Manufacturing, China, Post-Pandemic Era.

Abstract

The mechanism by which ESG performance impacts corporate financial performance has earned significant attention. However, most studies are primarily based on pre-pandemic data, failing to precisely reflect how the operational environment of businesses was impacted by the COVID-19 pandemic. Particularly in China's manufacturing sector, which was severely affected by the pandemic. Therefore, the correlation between ESG metrics and financial outcomes for Chinese manufacturing firms might have shifted. This study employs post-pandemic data from China's manufacturing sector and utilizes a time fixed effects model for analysis. The findings reveal that the social dimension (S) has a negative impact on the financial performance of Chinese manufacturing enterprises, while the governance dimension (G) has a positive effect. Additionally, the environmental dimension (E) shows little to no correlation with financial performance. Furthermore, the overall ESG performance’s influence on financial performance varies across different models. By adopting a timelier and industry-specific perspective, this study supplements current studies that examining how ESG factors influence the financial outcomes of Chinese manufacturing companies.

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