ESG Ratings and Corporate Value

Abstract

ESG as a concept advocates companies to pay more attention to environmental friendliness, social responsibility and corporate governance in their development process. Companies can attract investment and enhance their competitiveness by developing ESG concepts. Based on the data of Chinese listed companies for five years from 2017 to 2021, relevant indicators are constructed, and regression analysis is conducted on them using static panel models to empirically investigate the impact of ESG performance on corporate value. Specifically, this study documents a significant positive relationship between ESG performance and corporate value. The results still largely hold after a robustness checks, including alterative measure of corporate value. This study contributes to the existing literature on the economic consequences of ESG and provides implications for both researchers, investors, and practitioners.

Keywords

• esg rating
• corporate value
• esg disclosure
• corporate governance