Does investor sentiment enhance the impact of ESG ratings on firms' financial performance? Evidence from China

IF 1.1 4区 经济学 Q3 ECONOMICS
Qingyu Hu, Qi Wang
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引用次数: 0

Abstract

Prior studies have explored the link between ESG ratings and firms' financial performance, but few have focused on its interplay with investor sentiment. This study examines how investor sentiment moderates the relationship between ESG ratings and financial performance. We use a fixed-effect regression model applied to panel data from Chinese listed firms from 2011 to 2020. We find strong evidence that investor sentiment can reinforce the impact of ESG ratings on financial performance. We further investigate how investor sentiment moderates the relationships between the dimensions of ESG—environmental (E), social (S), and governance (G)—performance, and financial performance, respectively. Evidence shows that investor sentiment can enhance the negative impact of E on financial performance, while it enhances the positive impacts of S and G on financial performance. Our results are robust across various econometric techniques, including generalised-least-squares regression, first-difference regression, and system-generalised method of moments estimation. We provide insights for firm managers on leveraging investor sentiment to enhance ESG strategies to improve financial performance and offer implications for policymakers in crafting effective regulations that account for investor sentiment dynamics.

投资者情绪是否增强了ESG评级对公司财务业绩的影响?来自中国的证据
之前的研究已经探讨了ESG评级与公司财务业绩之间的联系,但很少有人关注其与投资者情绪的相互作用。本研究探讨投资者情绪如何调节ESG评级与财务绩效之间的关系。本文采用固定效应回归模型对2011 - 2020年中国上市公司面板数据进行分析。我们发现强有力的证据表明,投资者情绪可以强化ESG评级对财务业绩的影响。我们进一步研究了投资者情绪如何分别调节esg -环境(E)、社会(S)和治理(G) -绩效和财务绩效之间的关系。有证据表明,投资者情绪可以增强E对财务绩效的负向影响,同时增强S和G对财务绩效的正向影响。我们的结果在各种计量经济学技术中都是稳健的,包括广义最小二乘回归、一阶差分回归和系统广义矩估计方法。我们为公司管理者提供了利用投资者情绪来加强ESG战略以改善财务绩效的见解,并为政策制定者提供了制定有效法规的建议,这些法规考虑了投资者情绪的动态。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
1.70
自引率
0.00%
发文量
27
期刊介绍: Asian-Pacific Economic Literature (APEL) is an essential resource for anyone interested in economic development in the Asian-Pacific region. With original articles on topical policy issues, literature surveys, and abstracts of articles from over 300 journals, APEL makes it easy for you to keep ahead of the proliferating research on this dynamic and increasingly important region. Read by politicians, journalists, businesspeople, policy-makers, industrialists and academics, APEL avoids technical jargon, and is the only journal devoted to one-stop, in-depth reporting of research on the development of Asian-Pacific economies.
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