The Influence of ESG Ratings on Financial Performance of Listed Companies in Developing Countries: A Case Study of China's Market
(2024) NEKN02 20241Department of Economics
- Abstract
- In this study, we use the Chinese market over the period 2012–2022 as a case to investigate the impact of environmental, social, and governance (ESG) ratings on the financial performance of publicly traded companies in developing countries. After measuring Return on Assets and Tobin’s Q as explanatory variables, we found a significant positive correlation between financial performance and ESG ratings. This indicates that firms with higher ESG ratings have better profitability and market valuation.
Further analyses show that social responsibility and corporate governance factors have a greater effect on financial performance than environmental factors. ESG ratings positively affect the financial performance of both non-state-owned and... (More) - In this study, we use the Chinese market over the period 2012–2022 as a case to investigate the impact of environmental, social, and governance (ESG) ratings on the financial performance of publicly traded companies in developing countries. After measuring Return on Assets and Tobin’s Q as explanatory variables, we found a significant positive correlation between financial performance and ESG ratings. This indicates that firms with higher ESG ratings have better profitability and market valuation.
Further analyses show that social responsibility and corporate governance factors have a greater effect on financial performance than environmental factors. ESG ratings positively affect the financial performance of both non-state-owned and state-owned firms, suggesting a growing emphasis on ESG factors in the Chinese market. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9156724
- author
- Ma, Yunjin LU and Mao, Hongyi LU
- supervisor
- organization
- course
- NEKN02 20241
- year
- 2024
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- ESG ratings, Financial Performance, China, Return on Assets, Panel Data Analysis, Fixed effect.
- language
- English
- id
- 9156724
- date added to LUP
- 2024-08-12 15:57:37
- date last changed
- 2024-08-12 15:57:37
@misc{9156724, abstract = {{In this study, we use the Chinese market over the period 2012–2022 as a case to investigate the impact of environmental, social, and governance (ESG) ratings on the financial performance of publicly traded companies in developing countries. After measuring Return on Assets and Tobin’s Q as explanatory variables, we found a significant positive correlation between financial performance and ESG ratings. This indicates that firms with higher ESG ratings have better profitability and market valuation. Further analyses show that social responsibility and corporate governance factors have a greater effect on financial performance than environmental factors. ESG ratings positively affect the financial performance of both non-state-owned and state-owned firms, suggesting a growing emphasis on ESG factors in the Chinese market.}}, author = {{Ma, Yunjin and Mao, Hongyi}}, language = {{eng}}, note = {{Student Paper}}, title = {{The Influence of ESG Ratings on Financial Performance of Listed Companies in Developing Countries: A Case Study of China's Market}}, year = {{2024}}, }