1. Introduction
In recent years, the world has faced challenges brought about by the environment, social responsibility, and governance. Moreover, as the global uncertainties generated by the onset of the COVID-19 pandemic have intensified, the concept of environmental, social, and governance (ESG) development has attracted increasing attention. In 2022, the U.S. Department of Transportation’s Federal Highway Administration announced a carbon reduction program that will release a total of USD 6.4 billion to help states develop strategies to mitigate the national climate crisis. At the same time, the European Commission announced the launch of its Cities Mission Program, which aims to see 100 cities become climate-neutral by 2030.
Although China’s ESG development started late compared with the European Union, it is still in the early stages of development. However, with the increasing attention and acceptance of ESG development in various fields in China, it is on course to only further develop. In China, with the explicit inclusion of ESG development in investor relations management in April 2022, ESG performance has begun to become a new direction of investment supervision.
From 2018 to 2020, the number of cases handled by the China Securities Regulatory Commission (CSRC) displayed a downward trend. However, in 2020, the CSRC received 435 effective reminders about illegal acts and misconduct, launched 353 new investigations, and opened 282 court cases. These illegal and improper behaviors have seriously affected the stability and health of China’s capital market and damaged the interests of investors.
The financial irregularities of listed companies have the most direct impact on investors’ interests [1]. When listed companies carry out illegal behaviors such as fictitious assets, inflated profits, false statements, and major omissions, they send the wrong signals to the market, making investors unable to obtain real and accurate information, misleading investors when it comes to judging the investment value of enterprises, and bringing opportunity costs or other losses to investors [2]. Second, as the perpetrators of corporate financial violations, companies themselves will bear the consequences caused by the discovery and punishment of violations. For example, the loss of corporate reputation [3,4] and corporate competitiveness will become key issues [5,6]. Finally, the financial irregularities of listed companies will also affect the healthy development of the market [7]. When such irregularities involve independent institutions such as accounting firms and asset appraisal institutions, investors’ trust in third-party institutions will be affected regardless of whether these institutions are subjectively involved. The credit crisis caused by such corporate violations may spread to the securities market and cause economic turmoil.
Numerous studies have documented that improving ESG performance can reduce corporate risks [8,9,10], enhance enterprises’ external competitive advantage [11], and reduce the cost of capital and equity [12,13]. Meanwhile, ESG performance can also reduce the probability of corporate bankruptcy [14,15] and the possibility of financial distress [16]. Therefore, by improving ESG performance, enterprises can improve their financial status and reduce the possibility of financial violations. In addition, corporate environmental and social responsibility is closely linked to the supervision mechanism of stakeholders, who are better able to supervise the implementation of internal control in enterprises [17] and improve such an environment [18]. High-quality internal control can inhibit the occurrence of corporate financial irregularities [19]. Therefore, it is necessary to explore the link between ESG performance and corporate financial irregularities.
Based on the risk management theory, enterprises can alleviate the sanctions imposed by stakeholders by improving their social responsibility performance in times of crisis. In addition, strengthening corporate social responsibility performance can also enhance the market’s credit rating and reduce bank credit risk, thus reducing the bankruptcy risk of enterprises. At the same time, Albuquerque et al. (2019), Hoepner et al. (2020), and Hong and Liskovich (2015) supported the risk management theory with empirical research; they showed that the better corporate social responsibility performance is, the lower the systemic risk, downside risk, and legal risk will be [8,9,10]. In addition, Boubaker et al. (2020) proved through empirical research that the better the corporate social responsibility performance, the lower the possibility of financial distress [16]. In short, the better the ESG performance of the enterprise, the lower the various risks it faces, the lower the probability of bankruptcy, and the better the investment environment. In this case, the motivation of enterprise management to plan opportunistic behavior is small, so the possibility of enterprise financial irregularities is low.
In addition, according to the results of this study, listed companies should come to understand the direct impact mechanism between ESG performance and financial management in the future. At the same time, enterprises should implement a sense of social responsibility into every part of the business process and reduce the opportunistic behavior of management, such as inadequate information disclosure and earnings management. In addition, from the perspective of stakeholders, the public, media, and institutional investors should give full play to the supervision and governance effect of stakeholders and actively guide enterprises to improve ESG performance. For example, when the public discovers that the enterprise has fostered immoral and illegal behavior, the public should use the legitimate rights and interests to oppose such illegal behavior; the media should promote the mining and interpretation of corporate information using the Internet and periodical media, and focus on the fulfillment of corporate social responsibility; institutional investors should make full use of agency and the right to know, establish ESG-related factors such as investment objectives, strengthen communication with management, alleviate agency problems, and restrain the company’s financial violations.
Most of the existing literature focuses on the analysis of the impacts of ESG performance and firm performance. On the one hand, most research results support the positive effect of ESG performance on corporate financial performance [20,21]. On the other hand, some scholars have proved that ESG scores are significantly negatively correlated with financial performance [22,23]. Finally, other research results have proved that there is an uncertain relationship between ESG performance and corporate financial performance. Some scholars have found that the relationship between ESG activities and firm performance is invertedly U-shaped, which indicates that the relationship is positive before a certain threshold, and once ESG activities exceed the threshold, they begin to have a negative impact [24]. There are few studies on ESG performance and financial irregularities. Yuan et al. (2022) proved a negative correlation between ESG performance and corporate financial irregularities through an empirical study [25]. They also showed that when internal controls and public oversight are strict, the negative impact of ESG disclosure on financial irregularities is significantly enhanced [25]. However, Yuan et al.’s study only considered the impact mechanism of ESG performance on corporate financial irregularities from the perspective of internal and external supervision and did not consider the impact of different types of stakeholders on ESG performance and irregularities. This study introduces the attention of the public, media, and institutional investors as a moderating variable, and more comprehensively studies the linear relationship between ESG performance and financial irregularities, providing a new direction for future research.
Among the many stakeholders, the public, media, and institutional investors can play an effective role in terms of supervision and governance to effectively constrain the opportunistic behavior of management [26,27,28].
Public attention refers to attention from entities such as government agencies, investors, media, and consumers that is directed toward the enterprise, which is the premise of the public’s response to the enterprise’s behavior [29]. Media attention refers to the degree of attention paid to enterprises by newspapers, magazines, the Internet, and other media. Media attention is a very important external supervision mechanism. Such attention can promote enterprises to actively improve environmental management and undertake social responsibility by widely releasing information to the community and creating legal image pressure for enterprises [30]. Investor attention is a relatively broad concept. In the current study, the main body of investors refers to institutional investors. Saleh et al. determined that CSR disclosure maintained and attracted institutional investors’ investment [31].
According to the theory of information asymmetry, there is a significant difference in the level of information understanding between enterprise management and external stakeholders. Moreover, the latter lack the knowledge and channels to interpret corporate information correctly. However, the public, media, and institutional investors can effectively alleviate other stakeholders from experiencing difficulty in obtaining and interpreting information by capturing, interpreting, and disseminating ESG information, thereby reducing the information asymmetry between enterprises and stakeholders [32]. At the same time, based on the existence of a salary incentive mechanism, the management may choose high-yield, high-risk investment projects while ignoring the long-term goal of the sustainable development of the enterprise. As the attention of stakeholders increases, the transparency of information between the management and other stakeholders will also increase. This is conducive to restraining the management’s short-sighted behavior and can reduce their environmental opportunistic behavior, thereby reducing enterprises’ motivations when it comes to planning financial irregularities.
Therefore, this study empirically verifies the impact of an enterprise’s ESG performance on financial irregularities. Second, we examine whether the attention of the public, media, and institutional investors plays a moderating role. This study helps to broaden the relevant theories of corporate social responsibility (CSR) and financial management and provides theoretical support for enterprises to improve ESG performance and curb financial irregularities.
2. Theoretical Review and Hypotheses
2.1. Impact of ESG Performance on Corporate Financial Irregularities
Risk management theory suggests that even in times of crisis, CSR generates “moral capital” and “relational wealth” through relationships with stakeholders [33]. This “moral capital” creates a “reservoir of goodwill” that provides insurance-like protection in the event of poor performance and mitigates “negative stakeholder assessments” [33]. In other words, the performance of CSR alleviates the sanctions imposed on the company by stakeholders when a crisis occurs and reduces the fluctuation of future cash flow and risk [34]. At the same time, Chakraborty et al. (2019) provided supporting evidence for risk management theory in that ESG performance can significantly reduce corporate risk [34]. They found that under adverse market conditions, companies with better ESG performance will face lower risks [35].
Hong and Kacperczyk established that companies with good CSR and ESG performance have a wider investor base and face lower litigation risk [36]. Owing to product differentiation strategies, companies with better ESG performance have less price elasticity of demand and therefore face lower systemic risk [8]. Meanwhile, Hoepner et al. (2020) found that ESG performance is negatively correlated with firm downside risk [9]. In addition, Hong and Liskovich demonstrated that companies with higher ESG ratings are more likely to obtain more lenient settlements from prosecutors; therefore, their legal risk is lower [10]. In summary, existing research has proved that companies with better ESG performance are less likely to face risks. Therefore, it is less likely that corporate management will plan violations to reduce risks. On the contrary, enterprises with poor ESG performance are faced with greater risks, and their management is most likely to solve the “crying need” by planning violations such as market manipulation, internal trading, and major disclosure violations. Therefore, we propose the following:
Companies with better ESG performance have fewer financial irregularities.
2.2. Moderating the Effect of Public Attention
Public attention refers to the degree of attention that is directed to enterprises by government agencies and consumers, which is the premise of public response to corporate behaviors [37]. In recent years, the public has increasingly demanded that enterprises focus more on ethical, social, and environmental issues. This demand motivates companies to adopt socially appropriate measures and establish alignment between business operations and social values [38]. Based on the theory of legitimacy, when corporate behavior fails to fulfill the corresponding social responsibility or causes pollution to the social environment, the public should actively safeguard their rights and interests. Enterprises disclose social and environmental information to enhance public recognition and respect. The public’s demand for enterprises to actively provide social responsibility disclosure urges enterprises to constantly adjust their behaviors to ensure high-quality non-financial information disclosure. Moreover, public attention is an important way to connect enterprises with stakeholders [37]. Companies subject to more public supervision will enhance the communication and interaction between enterprises and stakeholders, reduce the phenomenon of information asymmetry, and increase investment in environmental and corporate governance, improving corporate value and establishing a positive reputation and image. Therefore, companies with higher public attention are subject to a wider scope of supervision, and ESG performance is more likely to inhibit financial irregularities. In summary, we formulate the following hypothesis:
Public attention has a negative moderating effect on corporate ESG performance in inhibiting financial violations.
2.3. Moderating the Effect of Media Attention
Media attention refers to the coverage of company news by online media and journals, including the number of articles published and reprinted by company-related online media [39]. According to media governance theory, the media can effectively reduce information asymmetry through its information dissemination function. Furthermore, media attention plays a corporate governance function through external mechanisms such as the reputation mechanism. This refers to the idea that the greater the media supervision, the more cautious the management will be. In turn, the enterprises will then release higher-quality accounting information [40]. Media coverage and the publicity of CSR and environmental responsibility direct and focus stakeholders’ attention onto corporate CSR. Therefore, media coverage brings different economic returns to companies with different CSR performances [41]. Companies with higher media attention have higher popularity, which can promote environmental protection and sustainable economic development [42]. Compared with other stakeholders, the media can also access and investigate a company’s environmental pollution; therefore, when media attention increases, it is necessary for companies to improve ESG performance and reduce financial irregularities to cope with social pressure, for example, by increasing research and development investment, promoting innovation activities, and meeting the needs of various stakeholders. Thus, enterprises can establish and maintain a good image when it comes to green responsibility. Therefore, we formulate the following hypothesis:
Media attention has a negative moderating effect on corporate ESG performance in inhibiting financial irregularities.
2.4. Moderating the Effect of Institutional Investor Attention
According to the principal–agent theory, when managers have information advantages over owners and there is a basic conflict of interest between them, such managers are likely to achieve short-term performance based on their information advantages and damage the long-term interests of enterprises [43]. Institutional investors have the right to know and can solicit voting proxies from minority shareholders. In addition, such investors can also put pressure on CSR issues via direct voting, submitting interim shareholder proposals, and requiring companies to take corresponding countermeasures [44]. Obviously, institutional investors can promote enterprises to actively undertake environmental responsibility by virtue of their scale advantage [45]. In addition, He et al. (2019) and Lewis et al. (2015) argued that institutional investors can perform supervisory functions and restrain management’s self-interested behavior [46,47], which will reduce earnings management [48], thereby reducing corporate risk [49]. In summary, institutional investors drive stronger corporate-level ESG performance [45]. Furthermore, the higher the attention of institutional investors, the broader the scope of their supervision of management. This suppresses the management’s opportunistic behavior and effectively reduces the probability of corporate financial irregularities. Therefore, we propose the following hypothesis:
The attention of institutional investors has a negative moderating effect on corporate ESG performance in inhibiting financial violations.
Our research model is outlined in Figure 1.
3. Research Design
3.1. Data and Samples
This study adopted 1050 observed values of China’s A-share listed enterprises from 2011 to 2020 as the research object. The corporate financial data and financial violations were from the CSMAR database, the public and media attention were from CNRDs, and the corporate ESG data were from the Bloomberg database. To ensure the accuracy and representativeness of the data, the initial sample data were processed as follows: (1) The financial and real estate sectors were excluded, owing to the fact these two industries’ financial indicators are different from other industries. (2) The enterprises with missing values, with losses for two consecutive years (ST), with losses for three consecutive years (ST*), the listed companies with special transfer (PT), and those that went bankrupt during the study period were excluded. (3) To reduce the impact of abnormal value fluctuations, the variables are Winsorized at the 1% level. (4) The continuous variables were logged to reduce the interference of heteroscedasticity.
3.2. Definition of Variables
3.2.1. Dependent Variable
Corporate financial irregularities were the dependent variable. Referring to Yuan et al. (2022), we used the dummy variable VIO to estimate the financial irregularities: 1 when the firm committed financial irregularities in the given year, and 0 otherwise [25]. The financial irregularities mainly included fictitious profits, misstated assets, false records (misleading statements), delayed disclosure, material omissions, and mis-disclosure, etc. The corporate financial violations were from the CSMAR database.
3.2.2. Independent Variable
Enterprises’ ESG performance was the independent variable of this study. Currently, most existing studies use ratings or scores from third-party rating agencies as proxy variables for corporate ESG performance. At present, the mainstream ESG evaluation includes the Thomson Reuters ESG score [50], Bloomberg ESG rating [51], Wind ESG rating, and so on. We adopted the Bloomberg ESG score as the proxy variable of enterprise ESG performance. The Bloomberg database provides a comprehensive ESG assessment report that includes a large number of ESG indicators and disclosure reports. At the same time, the Bloomberg database can also be on the environment, social responsibility, corporate governance, and other aspects, each with a separate rating. Scores range from 0 to 100. With the increase in non-financial information disclosure, the ESG disclosure score of enterprises will also increase. The Bloomberg database gathers information on the environmental policies of listed companies worldwide, including publicly disclosed information and news items, and converts them into data [52]. In addition, the Bloomberg ESG score is more transparent, allowing investors to view not only the scoring method but also the company reports behind each rating.
3.2.3. Moderating Variables
The first moderating variable in this study was the degree of public attention. Referring to Cheng and Liu (2018) and He and Shi (2022), we used the Internet search volume index (WSVI) of Chinese listed companies as a proxy variable for the public attention (PA) directed toward individual listed companies and the median of the annual Internet search volume index in order to measure the public attention [37,53]. The stock code, abbreviation, and full name of a single company can be used as keywords to directly reflect the WSVI of each listed company.
The second variable was media attention. Referring to the measurement methods in previous studies, we adopted the number of media reports and defined media attention (MEDIA) as the logarithm of the total number of online and newspaper headlines for a company [54,55].
The third variable was investor attention. Referring to Liu and Wang (2022), the institutional ownership ratio was used as a proxy variable for investor attention, and the total institutional ownership ratio (INVEST) was defined as the sum of the proportion of the total number of outstanding shares held by all institutional investors at the end of the year of a company [56].
3.2.4. Control Variables
This study drew on the related research of Yuan et al. (2022) and Zhang and Jin (2022) and introduced the following control variables: First, we controlled the main firm-level variables, including firm SIZE (SIZE), firm financial performance (ROA), firm AGE (AGE), firm assets and liabilities (LEV), current asset turnover (CAT), and capital intensity (CD) [50,57]. At the same time, we also controlled the variable at the corporate governance level: ownership type (STATE). In addition, year and industry dummy variables were added to control the impact of time, industry, and other factors on corporate financial violations. The variables and their measurement methods are listed in Table 1.
3.3. Model Design
Model 1 was used to test Hypothesis 1. If α1 was greater than 0, ESG performance had an inhibitory effect on corporate financial irregularities, which means Hypothesis 1 is true.
VIOit = α0 + α1ESG + ΣControlit + ΣYEAR + ΣINDUS + εit(1)
Model 2 was used to test Hypothesis 2. If β3 was greater than 0, the higher the public attention of the firm, the higher the degree of inhibition of ESG performance on financial irregularities of the firm; that is, Hypothesis 2 is true.
VIOit = β0 + β1ESG + β2PA + β3PA × ESG + ΣControlit + ΣYEAR + ΣINDUS + εit(2)
Model 3 was used to test Hypothesis 3. If γ3 was greater than 0, the higher the media attention of the firm, the higher the degree of inhibition of ESG performance on financial irregularities of the firm; that is, Hypothesis 3 is true.
VIOit = γ0 + γ1ESG + γ2MEDIA + γ3MEDIA × ESG + ΣControlit + ΣYEAR + ΣINDUS + εit(3)
Model 4 was used to test Hypothesis 4. If φ3 was greater than 0, it means that the higher the institutional investor attention of the firm, the higher the degree of inhibition of ESG performance on financial irregularities of the firm. That is, Hypothesis 4 is true.
VIOit = φ0 + φ1ESG + φ2INVEST + φ3INVEST × ESG + ΣControlit + ΣYEAR + ΣINDUS + εit(4)
The p values of Hausman test results of Models (1)–(4) were all less than 0.05. Therefore, we adopted the fixed-effect model for regression.
4. Empirical Analysis Results
4.1. Descriptive Statistics
As seen in Table 2, the average value of corporate financial irregularities was 0.1410, indicating that at least 1 out of every 10 companies had financial irregularities every year. The average value for ESG performance was 22.9576, and the maximum value was 43.39, documenting that most enterprises have poor ESG performance. The standard deviation for ESG performance was 4.5361, indicating that there are large differences in ESG performance among different enterprises. Furthermore, it also demonstrates that enterprises have a weak awareness of improving ESG transparency and disclosure. The average and maximum values for public attention were 7.188 and 9.093, respectively, and the standard deviation was 0.591, which reveals that different enterprises receive different degrees of public attention. The maximum and minimum values for media attention were 7.66 and 0, respectively, which indicates that some sample enterprises receive high media attention, while some do not receive media attention. The maximum value and average value for investor attention were 3.881 and 4.490, respectively, indicating that most enterprises receive high attention from investors. In terms of control variables, the average return on assets was 0.0484, average turnover of current assets was 3.247, average asset/liability ratio was 0.485, and average capital intensity is 1.935. In addition, the standard deviation of some control variables was relatively large, demonstrating that there were significant differences in the observed values of sample enterprises, which may affect the financial violations of enterprises.
4.2. Correlation Analysis
As reported in Table 3, the ESG performance of sample enterprises was significantly negatively correlated with financial irregularities, which was significant at the 1% level. The results of the correlation analysis preliminarily support H1 to a certain extent. The VIF value of each variable was less than three, indicating that there was no problem with multicollinearity.
4.3. Regression Results Analysis
From the results of Model 1 in Table 4, ESG performance was negatively correlated with corporate financial violations at the 1% level, and the regression coefficient was −0.0177. This indicates that ESG performance negatively affects corporate financial violations, which means the better the ESG performance, the lower the probability of the enterprise planning financial violations. Therefore, H1 is true, which also demonstrates that in the case of good ESG performance, various risks of enterprises, such as downside, legal, and systemic risks, are reduced. Therefore, the motivation of enterprises to plan financial irregularities will be weakened, which is conducive to enhancing their own influence and maintaining a good corporate image.
Model 2 revealed that the regression coefficient between ESG performance and corporate financial irregularities was negatively correlated at the 1% level. At the same time, the interaction term between ESG performance and public attention was significant at the 5% level, and the regression coefficient was 0.0109. This indicates that public attention has a negative moderating effect on corporate ESG performance in inhibiting financial irregularities, which verifies H2. In other words, when ESG performs well, enterprises with higher public attention have a lower probability of planning financial violations. The reason for this difference is that companies with higher public attention are subject to more diversified supervision from society and the public, including the attention of regulators. Therefore, the more constrained the enterprise, the greater the social responsibility it needs to undertake. Based on the strong motivation, the enterprise needs to take action to optimize ESG performance, and finally inhibit the occurrence of financial irregularities. Therefore, enterprises with higher public attention have better ESG performance and lower probability of planning financial violations.
Model 3 revealed that the regression coefficient between ESG performance and corporate financial irregularities was negatively correlated at the 1% level. At the same time, the interaction term between ESG and media attention was significant at the 5% level, with a regression coefficient of 0.0051. This demonstrates that media attention has a negative moderating effect on corporate ESG performance in inhibiting financial irregularities. Additionally, when ESG performs well, companies with higher media attention are less likely to plan financial violations. The reason for this difference is that the higher the media attention, the stronger the constraints and supervision that companies are subject to. Therefore, it is necessary for companies to improve their CSR and ESG performance to cope with social pressure. In summary, enterprises with higher media attention have better ESG performance and a lower probability of planning financial violations, which verifies H3.
Model 4 established that the regression coefficient between ESG performance and corporate financial irregularities was negatively correlated at the 1% level. At the same time, the interaction term between ESG and investor attention was significant at the 1% level, and the regression coefficient was 0.0203. This indicates that investor attention has a negative moderating effect on corporate ESG performance in inhibiting financial irregularities. Additionally, when ESG performs well, companies with high investor attention are less likely to plan financial irregularities. The shareholding ratio of institutional investors is used as the proxy variable of investor attention. The result reveals that the higher the ownership of institutional investors, the higher the CSR participation. Thus, it has a depressing effect on corporate financial irregularities, which verifies H4.
4.4. Robustness Test
This study may have the endogeneity problem of reverse causality, which means ESG performance can inhibit corporate financial irregularities. On the contrary, corporate financial irregularities have an inhibitory effect on ESG performance. To overcome the bias of the empirical results caused by this possible endogeneity problem, we referred to Zhang and Jin (2022) and selected the one-period lag of ESG performance (lESG) as the instrumental variable and used the two-stage least squares (2SLS) method to test the robustness of the results [57].
The regression results of 2SLS are reported in Table 5. In the first stage, the regression coefficients of lESG and ESG performance were significantly positive (0.9468) at the 1% level. In the second stage, the regression coefficients of ESG performance scores and corporate financial violations after the lESG performance was fitted in the first stage were significantly negative (−0.0203) at the 1% level. The results demonstrate that ESG performance has an inhibitory effect on corporate financial violations. The above results reveal that after considering the endogeneity problem, ESG performance is still negatively correlated with financial irregularities, which again verifies Hypothesis 1. By observing the results of the unidentifiable test (the second stage), the Kleiberging–Paap rk LM was 122.498, and the p-value was equal to 0.0000, indicating that the null hypothesis of “insufficient identification of instrumental variables” was significantly rejected at the 1% level, which indicates that the selected instrumental variable lESG performance can be identified. In the second stage, the Cragg–Donald Wald F statistic for the weak instrumental variable was 2763.499, which was much higher than the 10% judgment level for the Stock-Yogo weak ID test critical value of 16.38, indicating that there was a problem of no weak instrumental variable.
5. Discussion and Conclusions
5.1. Discussion
As an important player in socio-economic development and environmental governance, the ESG performance of enterprises has received increasing attention. The relationship between ESG performance and firm performance has been widely considered by researchers and investors [20,22,24]. However, there are few empirical studies exploring the relationship between ESG performance and financial irregularities. Yuan et al. (2022) proved through empirical research that ESG performance can reduce the motivation of enterprises to commit financial irregularities [25]. In addition, Yuan et al. (2022) also proved that under good internal and external regulatory conditions, ESG disclosure has a significantly stronger inhibitory effect on financial irregularities than poor regulatory conditions [25]. However, existing studies have not considered the impact of internal and external stakeholders on ESG performance and corporate financial irregularities. Since internal and external stakeholders have a certain monitoring effect on corporate ESG performance and financial irregularities, we believe that analyzing the relationship between ESG performance and corporate financial irregularities from the perspective of stakeholders is more conducive to optimizing corporate ESG performance and improving corporate financial management. This study takes the attention of the public, media, and investors as the moderating variable and discusses the relationship between ESG performance and corporate financial irregularities more comprehensively from the perspective of stakeholders. The results show that ESG performance can reduce corporate financial irregularities; moreover, the greater the public, media, and investor attention, the greater the degree to which ESG inhibits financial misconduct.
5.2. Conclusions
With growing global attention being directed toward ESG performance, corporate ESG performance profoundly impacts corporate finance. Enterprises affect ESG performance by fulfilling social responsibilities and disclosing information related to the environment, society, and governance. Good ESG performance reduces the possibility of financial irregularities by reducing different types of risks for enterprises. Using Chinese A-share listed companies from 2011 to 2020, we investigated the impact of ESG performance on corporate financial irregularities.
This study draws the following conclusions: First, good ESG performance can effectively inhibit the occurrence of corporate financial irregularities. The results of this study support the risk management theory, since in the crisis period, the performance of corporate social responsibility can increase financial resources and enhance the market’s credit rating, thereby reducing bank credit risk, and ultimately increasing the cash flow of enterprises in the crisis period. This, to some extent, reduces the incentive for management to be opportunistic, thus reducing the likelihood of financial irregularities. Second, the empirical analysis results of this study show that the higher the public attention, the higher the degree of ESG performance required to inhibit corporate financial irregularities. The findings support the legitimacy theory that the public should take the initiative to defend their rights and interests when companies do not respect social and moral values. At the same time, companies are subject to severe sanctions from the public. Therefore, the more public attention a company receives, the easier it is for the public to detect wrongdoing. This encourages companies to be more cautious in their disclosure of non-financial information, which improves the quality of disclosure, optimizes ESG performance, and reduces the possibility of companies orchestrating financial irregularities. Third, the empirical analysis results of this study show that the higher the media attention, the higher the degree of ESG performance to inhibit corporate financial irregularities. The research results support the theory of media governance. Enterprises with higher media attention are subject to greater supervision, so as to optimize the ESG performance of enterprises, restrain their own behaviors, and reduce the occurrence of financial irregularities. Finally, the empirical analysis results of this study show that the higher the attention of institutional investors, the higher the degree of ESG performance required to inhibit corporate financial irregularities. The research results support the principal–agent theory. Institutional investors can express their investment objectives by exercising proxy power with a voting effect, enhancing communication with management, and alleviating agency problems between management and stakeholders [44]. Thus, companies are encouraged to improve the transparency of ESG information and reduce the occurrence of opportunistic behavior from management.
5.3. Implications
Our findings provide some theoretical and practical implications for improving corporate ESG performance and curbing financial irregularities.
This study expands the body of relevant literature. Although there is a lot of research on the influencing factors of ESG performance, these studies mainly discuss the relationship between ESG performance and enterprise performance; there are few studies on ESG performance and corporate financial irregularities. In addition, based on risk management theory, this study proves the direct influence mechanism of ESG performance on corporate financial irregularities. At the same time, the legitimacy theory, media governance theory, and principal–agent theory were used in this study to prove the impact of the attention of public, media, and institutional investors on the suppression of corporate financial violations, which enriched the relevant theories of ESG performance and financial management and provided a new direction for future research. As a result, public, media, and institutional investor attention served to support and monitor the extent to which ESG development inhibited corporate financial misconduct.
In practical terms, enterprises must actively undertake social responsibility and integrate the ESG concept into all aspects of production and operation. Moreover, the standardization of corporate financial management systems to reduce the possibility of financial irregularities should be promoted. Second, the public (government agencies, consumers, media, investors, etc.) should pay more attention to enterprises’ ESG performance. Government agencies should increase subsidies and use various fiscal policy tools to provide financial support for the development of enterprises, guiding these to foster good ESG performance and continuously enhancing enterprises’ enthusiasm to demonstrate green innovation. To encourage enterprises to continuously improve their ESG performance, consumers should continuously improve their awareness of green consumption and actively safeguard their legitimate rights and interests. Third, the media should pay greater heed to and expose enterprise information and enrich the forms of media communication. The mining and interpretation of enterprise information by online and periodical media and focusing on whether enterprises effectively improve ESG performance and actively undertake social responsibilities should be promoted. To narrow the information gap between management and stakeholders, professional and diversified information should be provided to stakeholders. Finally, the development of green bonds and financial derivatives should be promoted in a step-by-step manner, focusing on and guiding the investment decisions of institutional investors toward enterprises improving the ecological environment and actively assuming social responsibilities. Moreover, the scale of institutional investors should be expanded and institutional investors encouraged to give full play to the effect of supervision and governance, thereby improving ESG performance and restraining financial irregularities.
5.4. Limitations and Future Prospects
This study has the following limitations. First, owing to the lack of continuous and up-to-date data, we only used Bloomberg Consulting’s ESG score, which lacks data comparison. Second, due to data availability, this study only focused on listed companies, which may differ from non-listed companies. Future research can be improved from two aspects: first, the moderating effect of corporate ownership on the relationship between ESG and financial irregularities can be considered. In China, compared with non-state-owned enterprises, state-owned enterprises are more likely to obtain the support of external financial resources (preferential policies and government subsidies, etc.) to improve ESG performance and inhibit the possibility of financial irregularities. In addition, many studies have proved that ESG performance can not only improve the financial performance of enterprises, but also enterprises’ innovation ability. Therefore, the impact of ESG performance on enterprise innovation performance can be explored in future research.
Data curation and draft, D.L.; Methodology, review, and editing, S.J. All authors have read and agreed to the published version of the manuscript.
Not applicable.
The authors declare no conflict of interest.
Not applicable.
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as potential conflicts of interest.
Footnotes
Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
Variable definitions.
| Variable |
Variable |
Variable |
Measurement |
|---|---|---|---|
| Dependent variable | Financial irregularities | VIO | Dummy variable: takes 1 if the firm has a reported financial violation; takes 0 otherwise |
| Independent variable | ESG performance | ESG | Bloomberg ESG total score |
| Moderating variables | Public attention | PA | Ln (median of the annual Web search volume index) |
| Media attention | MEDIA | Ln (total number of news articles with this company in the headline) | |
| Investor attention | INVEST | Institutional investors’ share of total equity | |
| Control variables | Corporate listing lifespan | AGE | Ln (current year-listing year) |
| Asset/liability ratio | LEV | Total liabilities/total assets | |
| Enterprise size | SIZE | Ln (book value of total assets at the end of the year) | |
| Nature of enterprise | STATE | State-owned enterprise = 1, |
|
| Return on assets | ROA | Net profit/average balance of total assets | |
| Current asset turnover | CAT | Sales revenue/average balance of current assets | |
| Capital intensity | CD | Ratio of total assets to operating income | |
| Industry | INDUSTRY | Dummy variable | |
| Year | YEAR | Dummy variable |
Descriptive statistics.
| Variables | N | Mean | sd | Min | Max |
|---|---|---|---|---|---|
| VIO | 1050 | 0.1410 | 0.3481 | 0 | 1 |
| ESG | 1050 | 22.9576 | 4.5361 | 12.81 | 43.39 |
| PA | 1050 | 7.188 | 0.591 | 5.464 | 9.093 |
| MEDIA | 1050 | 4.752 | 1.047 | 0 | 7.660 |
| INVEST | 1050 | 3.881 | 0.444 | 1.163 | 4.490 |
| ROA | 1049 | 0.0484 | 0.0542 | −0.317 | 0.270 |
| CAT | 1050 | 3.247 | 3.699 | 0.100 | 35.94 |
| LEV | 1050 | 0.485 | 0.174 | 0.0341 | 0.916 |
| CD | 1050 | 1.935 | 1.821 | 0.303 | 22.69 |
| AGE | 1050 | 2.944 | 0.269 | 2.303 | 3.584 |
| STATE | 1050 | 0.554 | 0.497 | 0 | 1 |
| SIZE | 1050 | 23.17 | 1.053 | 20.65 | 25.96 |
Correlation analysis.
| VIO | ESG | PA | MEDIA | INVEST | AGE | ROA | CAT | STATE | SIZE | LEV | CD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| VIO | 1 | |||||||||||
| ESG | −0.288 *** | 1 | ||||||||||
| PA | −0.101 *** | 0.111 *** | 1 | |||||||||
| MEDIA | −0.036 | 0.155 *** | 0.561 *** | 1 | ||||||||
| INVEST | −0.229 *** | 0.097 *** | 0.120 *** | 0.095 *** | 1 | |||||||
| AGE | −0.064 ** | 0.013 *** | −0.056 * | −0.164 *** | 0.037 | 1 | ||||||
| ROA | −0.085 *** | 0.002 | 0.056 * | 0.158 *** | 0.125 *** | −0.081 *** | 1 | |||||
| CAT | −0.063 ** | 0.124 *** | 0.006 | 0.049 | 0.168 *** | −0.094 *** | 0.052 * | 1 | ||||
| STATE | −0.022 | 0.031 | 0.124 *** | −0.017 | 0.281 *** | 0.046 | −0.206 *** | 0.025 | 1 | |||
| SIZE | −0.068 ** | 0.328 *** | 0.419 *** | 0.172 *** | 0.337 *** | 0.215 *** | −0.113 *** | 0.110 *** | 0.303 *** | 1 | ||
| LEV | 0.096 *** | 0.084 *** | −0.014 | 0.012 | 0.127 *** | 0.136 *** | −0.495 *** | 0.119 *** | 0.158 *** | 0.444 *** | 1 | |
| CD | 0.081 *** | −0.114 *** | −0.118 *** | −0.275 *** | −0.088 *** | 0.070 ** | −0.126 *** | −0.225 *** | 0.122 *** | −0.006 | −0.006 ** | 1 |
Notes: ***, **, and * = p < 0.01, p < 0.05, and p < 0.1, respectively.
Regression results.
| Variables | Model (1) | Model (2) | Model (3) | Model (4) |
|---|---|---|---|---|
| ESG | −0.0177 *** | −0.0973 *** | −0.0450 *** | −0.0981 *** |
| (−6.7565) | (−3.1194) | (−3.6809) | (−5.3717) | |
| PA | −0.2539 ** | |||
| (−2.5580) | ||||
| PA × ESG | 0.0109 ** | |||
| (2.5600) | ||||
| MEDIA | −0.0865 * | |||
| (−1.6676) | ||||
| MEDIA × ESG | 0.0051 ** | |||
| (2.2221) | ||||
| INVEST | −0.6855 *** | |||
| (−6.1907) | ||||
| INVEST × ESG | 0.0203 *** | |||
| (4.4414) | ||||
| AGE | −0.1018 * | −0.1106 ** | −0.1079 ** | −0.1201 ** |
| (−1.8841) | (−2.0424) | (−2.0013) | (−2.2920) | |
| ROA | −0.0735 | −0.0272 | −0.1003 | 0.1721 |
| (−0.2918) | (−0.1079) | (−0.3961) | (0.7012) | |
| CAT | −0.0009 | −0.0007 | −0.0004 | 0.0006 |
| (−0.2478) | (−0.1857) | (−0.1127) | (0.1777) | |
| STATE | −0.0234 | −0.0142 | −0.0123 | 0.0240 |
| (−0.8697) | (−0.5236) | (−0.4560) | (0.8959) | |
| SIZE | −0.0159 | −0.0181 | −0.0291 * | −0.0002 |
| (−0.9976) | (−0.9544) | (−1.7602) | (−0.0138) | |
| LEV | 0.3446 *** | 0.3319 *** | 0.3513 *** | 0.4296 *** |
| (3.3890) | (3.2021) | (3.4487) | (4.3572) | |
| CD | 0.0063 | 0.0062 | 0.0078 | 0.0070 |
| (0.8176) | (0.8007) | (0.9857) | (0.9392) | |
| Constant | 1.3040 *** | 3.2068 *** | 2.0730 *** | 3.6608 *** |
| (3.7034) | (3.8761) | (4.2959) | (6.5471) | |
| Observations | 1050 | 1050 | 1050 | 1050 |
| R-squared | 0.190 | 0.195 | 0.197 | 0.248 |
| Year FE | YES | YES | YES | YES |
Notes: T-statistics in parentheses; ***, **, and * = p < 0.01, p < 0.05, and p < 0.1, respectively.
Robustness test.
| Variables | First Stage |
Second Stage |
|---|---|---|
| lESG | 0.9468 *** | |
| (42.33) | ||
| ESG | −0.0203 *** | |
| (−6.95) | ||
| AGE | 0.5129 * | −0.0818 * |
| (1.93) | (−1.80) | |
| ROA | 3.7818 * | 0.2250 |
| (2.12) | (0.91) | |
| CAT | −0.0002 | −0.0027 |
| (−0.01) | (−0.94) | |
| STATE | 0.0509 | 0.0229 |
| (0.36) | (0.93) | |
| SIZE | 0.3934 *** | 0.0049 |
| (4.17) | (−0.37) | |
| LEV | −0.5156 ** | 0.2743 ** |
| (−1.03) | (3.17) | |
| CD | −0.0428 | 0.0122 |
| (−1.42) | (1.60) | |
| Constant | −8.9435 *** | 0.8357 *** |
| (−4.25) | (3.02) | |
| Kleibergen–Paap rk LM statistic | 122.498 (Chi-sq(1) p-value = 0.0000) | |
| Weak identification test |
2763.499 | |
| Kleibergen–Paap rk Wald F statistic |
1791.658 |
|
| Observations | 887 | 887 |
| R-squared | 0.2240 | |
Notes: T-statistics in parentheses; ***, **, and * = p < 0.01, p < 0.05, and p < 0.1, respectively.
References
1. Smaili, N.; Labelle, R. Preventing and Detecting Accounting Irregularities: The Role of Corporate Governance; SSRN: Rochester, NY, USA, 2009; [DOI: https://dx.doi.org/10.2139/ssrn.1324143]
2. Aggarwal, R.; Hu, M.; Yang, J. Fraud, market reaction, and the role of institutional investors in Chinese listed firms. J. Portf. Manag. Spec. China Issue; 2015; 41, pp. 92-109. [DOI: https://dx.doi.org/10.3905/jpm.2015.41.5.092]
3. Carmichael, J.J.; Eaton, S.E. Security risks, fake degrees, and other fraud: A topic modelling approach. Fake Degrees and Fraudulent Credentials in Higher Education; Ethics and Integrity in Educational Contexts Eaton, S.E.; Carmichael, J.J.; Pethrick, H. Springer: Cham, Switzerland, 2023; Volume 5, pp. 227-250. [DOI: https://dx.doi.org/10.1007/978-3-031-21796-8_11]
4. Johnson, W.C.; Xie, W.; Yi, S. Corporate fraud and the value of reputations in the product market. J. Corp. Financ.; 2014; 25, pp. 16-39. [DOI: https://dx.doi.org/10.1016/j.jcorpfin.2013.10.005]
5. Sadaf, R.; Olah, J.; Popp, J.; Mate, D. Cases: A cross-country perspective. Sustainability; 2018; 3, 588. [DOI: https://dx.doi.org/10.3390/su10030588]
6. Zhou, Y.; Makridis, C. Financial Misconduct and Changes in the Employee Satisfaction; SSRN: Rochester, NY, USA, 2019; [DOI: https://dx.doi.org/10.2139/ssrn.3467787]
7. Li, P.; Yang, Z. Accounting fraud and prevention in listed companies in China. Int. J. Front. Sociol.; 2019; 1, pp. 23-31.
8. Albuquerque, R.; Koskinen, Y.; Zhang, C. Corporate social responsibility and firm risk. Manag. Sci.; 2019; 65, pp. 4451-4469. [DOI: https://dx.doi.org/10.1287/mnsc.2018.3043]
9. Hoepner, A.G.F.; Oikonomou, I.; Sautner, Z.; Starks, L.T.; Zhou, X. ESG Shareholder Engagement and Downside Risk; Finance Working Paper No. 671/2020 European Corporate Governance Institute: Brussels, Belgium, 2020; [DOI: https://dx.doi.org/10.2139/ssrn.2874252]
10. Hong, H.; Liskovich, I. Crime, Punishment and the Halo Effect of Corporate Social Responsibility; NBER Working Paper, 21215 National Bureau of Economic Research: Cambridge, MA, USA, 2015; [DOI: https://dx.doi.org/10.3386/w21215]
11. Luan, X.; Wang, X. Open innovation, enterprise value and the mediating effect of ESG. Bus. Process Manag. J.; 2023; 29, pp. 489-504. [DOI: https://dx.doi.org/10.1108/BPMJ-07-2022-0310]
12. El Ghoul, S.; Guedhami, O.; Kwok, C.C.Y.; Mishra, D.R. Does corporate social responsibility affect the cost of capital?. J. Bank. Financ.; 2011; 35, pp. 2388-2406. [DOI: https://dx.doi.org/10.1016/j.jbankfin.2011.02.007]
13. Sharfman, M.P.; Fernando, C.S. Environmental risk management and the cost of capital. Strateg. Manag. J.; 2008; 29, pp. 569-592. [DOI: https://dx.doi.org/10.1002/smj.678]
14. Cooper, E.; Uzun, H. Corporate social responsibility and bankruptcy. Stud. Econ. Financ.; 2019; 36, pp. 130-153. [DOI: https://dx.doi.org/10.1108/SEF-01-2018-0013]
15. Lin, K.C.; Dong, X. Corporate social responsibility engagement of financial distressed firms and their bankruptcy likelihood. Adv. Account.; 2018; 43, pp. 32-45. [DOI: https://dx.doi.org/10.1016/j.adiac.2018.08.001]
16. Boubaker, S.; Cellier, A.; Manita, R.; Saeed, A. Does corporate social responsibility reduce financial distress risk?. Econ. Model.; 2020; 91, pp. 835-851. [DOI: https://dx.doi.org/10.1016/j.econmod.2020.05.012]
17. Akisik, O.; Gal, G. The impact of corporate social responsibility and internal controls on stakeholders’ view of the firm and Finance performance. Sustain. Account. Manag. Policy J.; 2017; 8, pp. 246-280. [DOI: https://dx.doi.org/10.1108/SAMPJ-06-2015-0044]
18. Zhu, Y.; Sun, Y. The impact of coupling interaction of internal control and CSR on corporate performance: Based on the perspective (2017) of stakeholder. Procedia Eng.; 2017; 174, pp. 449-455.
19. Harasheh, M.; Provasi, R. A need for assurance: Do internal control systems integrate environmental, social, and governance factors?. Corp. Soc. Responsib. Environ. Manag.; 2023; 30, pp. 384-401. [DOI: https://dx.doi.org/10.1002/csr.2361]
20. Cek, K.; Eyupoglu, S. Does environmental, social and governance performance influence economic performance?. J. Bus. Econ. Manag.; 2023; 21, pp. 1165-1184. [DOI: https://dx.doi.org/10.3846/jbem.2020.12725]
21. Aboud, A.; Diab, A. The financial and market consequences of environmental, social and governance ratings, The implications of recent political volatility in Egypt, Sustainability Accounting. Manag. Policy J.; 2019; 10, pp. 498-520. [DOI: https://dx.doi.org/10.1108/SAMPJ-06-2018-0167]
22. Ruan, L.; Liu, H. Environmental, Social, Governance Activities and Firm Performance: Evidence from China. Sustainability; 2021; 13, 767. [DOI: https://dx.doi.org/10.3390/su13020767]
23. Duque-Grisales, E.; Aguilera-Caracuel, J. Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack. J. Bus. Ethics; 2021; 168, pp. 315-334. [DOI: https://dx.doi.org/10.1007/s10551-019-04177-w]
24. Pu, G. A non-linear assessment of ESG and firm performance relationship, evidence from China. Econ. Res.-Ekon. Istraživanja; 2023; 36, 2113336. [DOI: https://dx.doi.org/10.1080/1331677X.2022.2113336]
25. Yuan, X.; Li, Z.; Xu, J.; Shang, L. ESG disclosure and corporate financial irregularities: Evidence from Chinese listed firms. J. Clean. Prod.; 2022; 332, 129992. [DOI: https://dx.doi.org/10.1016/j.jclepro.2021.129992]
26. Xue, J.; He, Y.; Liu, M.; Tang, Y.; Xu, H. Incentives for corporate environmental information disclosure in China: Public media pressure, local government supervision and interactive effects. Sustainability; 2021; 13, 10016. [DOI: https://dx.doi.org/10.3390/su131810016]
27. Yao, S.; Pan, Y.; Sensoy, A.; Uddin, G.S.; Cheng, F. Green credit policy and firm performance: What we learn from China. Energy Econ.; 2021; 101, 105415. [DOI: https://dx.doi.org/10.1016/j.eneco.2021.105415]
28. Zhang, Z.; Chen, H. Media coverage and impression management in corporate social responsibility reports: Evidence from China. Sustain. Account. Manag. Policy J.; 2020; 11, pp. 863-886. [DOI: https://dx.doi.org/10.1108/SAMPJ-10-2018-0293]
29. Chen, W.; Chu, Z.; Gu, W. Assessing the role of public attention in China’s wastewater treatment: A spatial perspective. Technol. Forecast. Soc. Chang.; 2021; 171, 120984.
30. Qi, B.; Yang, R.; Tian, A. Evidence from China. Rev. Quant. Financ. Account.; 2014; 42, pp. 571-597. [DOI: https://dx.doi.org/10.1007/s11156-013-0353-0]
31. Saleh, M.; Zulkifli, N.; Muhamad, R. Corporate social responsibility disclosure and its relation on institutional ownership, evidence from public listed companies in Malaysia. Manag. Audit. J.; 2010; 25, pp. 591-613. [DOI: https://dx.doi.org/10.1108/02686901011054881]
32. Amiram, D.; Owens, E.; Rozenbaum, O. Do information releases increase or decrease information asymmetry? New evidence from analyst forecast announcement. J. Account. Econ.; 2016; 62, pp. 121-138. [DOI: https://dx.doi.org/10.1016/j.jacceco.2016.06.001]
33. Godfrey, P.C. The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Acad. Manag. Rev.; 2005; 30, 18378878. [DOI: https://dx.doi.org/10.5465/amr.2005.18378878]
34. Chang, K.; Kim, I.; Li, Y. The heterogeneous impact of corporate social responsibility activities that target different stakeholders. J. Bus. Ethics; 2014; 125, pp. 211-234. [DOI: https://dx.doi.org/10.1007/s10551-013-1895-8]
35. Chakraborty, A.; Gao, L.S.; Sheikh, S. Managerial risk taking incentives, Corporate social responsibility and firm risk. J. Econ. Bus.; 2019; 101, pp. 58-72. [DOI: https://dx.doi.org/10.1016/j.jeconbus.2018.07.004]
36. Hong, H.; Kacperczyk, M. The price of sin, the effects of social norms on markets. J. Financ. Econ.; 2009; 93, pp. 15-36. [DOI: https://dx.doi.org/10.1016/j.jfineco.2008.09.001]
37. Cheng, J.; Liu, Y. The effects of public attention on the environmental performance of high-polluting firms, based on big data from web search in China. J. Clean. Prod.; 2018; 186, pp. 335-341. [DOI: https://dx.doi.org/10.1016/j.jclepro.2018.03.146]
38. Gu, Y.; Ho, K.C.; Cheng, Y.; Gozgor, G. Public environmental concern, CEO turnover, and green investment, Evidence from a quasi-natural experiment in China. Energy Econ.; 2021; 100, 105379. [DOI: https://dx.doi.org/10.1016/j.eneco.2021.105379]
39. Yong, Z.; Anqi, L.A.; Lin, R.; Hu, Y. A study on the relationship between technical independent directors and enterprise innovation under media Attention. J. Financ. Account.; 2021; 9, pp. 258-267. [DOI: https://dx.doi.org/10.11648/j.jfa.20210906.16]
40. Billings, M.B.; Cedergren, M.C. Strategic silence, insider selling and litigation risk. J. Account. Econ.; 2015; 59, pp. 119-142. [DOI: https://dx.doi.org/10.1016/j.jacceco.2014.12.001]
41. Kong, G.W.; Kong, D.M.; Wang, M. Evidence from China. Singap. Econ. Rev.; 2020; 65, pp. 577-600. [DOI: https://dx.doi.org/10.1142/S021759081741003X]
42. Wu, W.; Liang, Z.; Zhang, Q. Effects of corporate environmental responsibility strength and concern on innovation Performance: The Moderating Role of Firm Visibility. Corp. Soc. Responsib. Environ. Manag.; 2020; 27, pp. 1487-1497. [DOI: https://dx.doi.org/10.1002/csr.1902]
43. Eisenhardt, K. Agency theory: An assessment and review. Acad. Manag. Rev.; 1989; 14, pp. 57-74. [DOI: https://dx.doi.org/10.2307/258191]
44. Sparkes, R.; Cowton, C.J. The maturing of socially responsible investment: A review of the developing link with corporate social responsibility. J. Bus. Ethics; 2004; 52, pp. 45-57. [DOI: https://dx.doi.org/10.1023/B:BUSI.0000033106.43260.99]
45. Dyck, A.; Lins, K.; Roth, L.; Wagner, H. Do institutional investors drive corporate social responsibility? International evidence. J. Financ. Econ.; 2019; 131, pp. 693-714. [DOI: https://dx.doi.org/10.1016/j.jfineco.2018.08.013]
46. He, J.; Huang, J.; Zhaom, S. Internalizing governance externalities: The role of institutional cross-ownership. J. Financ. Econ.; 2019; 134, pp. 400-418. [DOI: https://dx.doi.org/10.1016/j.jfineco.2018.07.019]
47. Lewis, B.W.; Walls, J.L.; Tang, Q. Gender diversity, Board Independence, Environment Committe and Greenhouse Gas Disclosure. Br. Account. Rev.; 2015; 47, pp. 409-424. [DOI: https://dx.doi.org/10.1016/j.bar.2014.01.002]
48. Ramalingegowda, S.; Utke, S.; Yu, Y. Common institutional ownership and earnings management. Contemp. Account. Res.; 2021; 38, pp. 208-241. [DOI: https://dx.doi.org/10.1111/1911-3846.12628]
49. Jiang, P.; Ma, Y.; Shi, B. Common ownership and stock price crash risk: Evidence from China. Aust. Econ. Pap.; 2022; 61, pp. 876-912. [DOI: https://dx.doi.org/10.1111/1467-8454.12259]
50. Di Tommaso, C.; Thornton, J. Do ESG scores effect bank risk taking and value? Evidence from European banks. Corp. Soc. Responsib. Environ. Manag.; 2020; 27, pp. 2286-2298. [DOI: https://dx.doi.org/10.1002/csr.1964]
51. Qiu, M.Y.; Yin, H. An analysis of enterprises’ financing cost with ESG performance under the background of ecological civilization construction. J. Quant. Econ.; 2019; 36, pp. 108-123.
52. Bloomberg. Behind the Bloomberg ESG Disclosure Score. 2016; Available online: http://framework-llc.com/bloomberg-esg-disclosure-scores-behind-the-terminal/ (accessed on 4 December 2022).
53. He, X.; Shi, J. The effect of air pollution on Chinese green bond market: The mediation role of public concern. J. Environ. Manag.; 2022; 325, 116522. [DOI: https://dx.doi.org/10.1016/j.jenvman.2022.116522]
54. Luo, Y.; Xiong, G.; Mardani, A. Environmental information disclosure and corporate innovation: The “Inverted U-shaped” regulating effect of media attention. J. Bus. Res.; 2022; 146, pp. 453-463. [DOI: https://dx.doi.org/10.1016/j.jbusres.2022.03.089]
55. Su, W.; Fan, Y.H. Impact of media attention on environmental performance in China. Environ. Chall.; 2021; 4, 100133. [DOI: https://dx.doi.org/10.1016/j.envc.2021.100133]
56. Liu, C.; Wang, X. Media and institutional investors focus on the impact on corporate sustainability performance. Sustainability; 2022; 14, 13878. [DOI: https://dx.doi.org/10.3390/su142113878]
57. Zhang, C.; Jin, S.Y. What drives sustainable development of enterprises? Focusing on ESG management and green technology innovation. Sustainability; 2022; 14, 11695. [DOI: https://dx.doi.org/10.3390/su141811695]
© 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.
Details
