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https://doi.org/10.62836/emi.v5i2.0012
Ma, R. (2026). The Influence of ESG Information on Investors’ Firm Preference in China’s Financial Market. Economics & Management Information, 5(2), 0012. https://doi.org/10.62836/emi.v5i2.0012
Volume 5, Issue 2, June 2026
Copyright (c) 2026 Ruijun Ma
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This work is licensed under a Creative Commons Attribution 4.0 International License.

The Influence of ESG Information on Investors’ Firm Preference in China’s Financial Market

This study investigates the influence of Environmental, Social, and Governance (ESG) information disclosure on investors’ preferences in China’s capital market. Using panel data on A-share-listed companies between 2016 and 2023, the paper employs fixed-effects regression models to examine the relationship between ESG ratings and excess stock returns, proxied by Buy-and-Hold Abnormal Returns (BHAR). The results reveal a significant negative association between ESG scores and BHAR. This suggests that ESG engagement may reduce investor enthusiasm, particularly among large firms, state-owned enterprises, and capital-intensive sectors. Further decomposition of ESG components suggests that environmental performance has the most pronounced effect on investor behavior. Robustness tests confirm the consistency of these findings across alternative specifications and data sources. Mechanism analysis identifies financing constraints and greenwashing perceptions as potential drivers of the negative impact. The study contributes to the growing ESG literature by offering empirical insights into the evolving dynamics of sustainable investing in emerging markets and highlighting the need for more transparent and credible ESG practices in China.

ESG environment firm’s performance

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Supporting Agencies

  1. Funding: This research received no external funding.