Toward sustainability: ESG bridging socioemotional wealth and sustainable financial in family firms

Abstract

The socioemotional wealth of family businesses fosters long-term orientation, aligning with the environmental, social, and governance (ESG) principles essential for sustainable value creation. This study utilised panel data from 1,181 Chinese-listed family firms between 2016 and 2020. It employed multiple regression and mediation analysis to examine how ESG engagement mediates the relationship between family control and the firms’ financial outcomes. The findings revealed that proactive ESG strategies enhance the positive effects of family control on financial outcomes, though the degree of mediation varied across performance indicators. These results highlight the strategic importance of integrating ESG considerations into financial planning for family businesses, offering valuable insights for managers and investors seeking to drive sustainable development through informed capital allocation and targeted governance structures. From a policy perspective, these results suggest the need for government incentives and enhanced disclosure standards to encourage broader ESG adoption among family firms in emerging markets.

Keywords

• Family business
• ESG
• Financial performance
• CSR
• Chinese market