A Review of the Role of ESG Performance of Listed Companies on Financial Performance: Theory, Effect, Influencing Factors and Path

DOI: https://doi.org/10.62517/jse.202411302

Author(s)

Rui Huang1, Jiawa Meng1, Sa Xiu2

Affiliation(s)

1Department of International Business, Jilin International Studies University, Changchun, Jilin, China 2Department of Accounting, Jilin Business and Technology College, Changchun, Jilin, China

Abstract

With the ongoing evolution of sustainability concepts, ESG has increasingly captured the spotlight in academic discourse. Therefore use citespace software to analyze previous trending in ESG, and sort out their relation by literature review. Results: (1) Scholars mainly use stakeholder theory, resource dependence theory, signal theory, agency theory, shareholder supremacy theory and cost-benefit theory when researching the relationship between the ESG performance and financial performance; (2) Currently, scholars have three perspectives regarding the impact of ESG performance on financial performance: positive relationship, inverse relationship and nonlinear relationship; (3) The ESG performance's influencing factors on financial performance are primarily reflected like the enterprise, geographical location; (4) When enterprises fulfil their ESG-related responsibilities, they mainly affect their financial performance through four paths: reducing information asymmetry, improving corporate innovation ability, increasing media attention and reducing the tax burden.

Keywords

ESG; Financial Performance; Theoretical Rationale; Impact Pathway; Impact Factors

References

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