arbiter
JournalsPricingAccount

Environmental, social, and governance (ESG) and financial performance of listed companies in the automotive industry in China

Zhaowen Wang & Philip L.‐F. Liu

Journal of Accounting and Taxation2025https://doi.org/10.5897/jat2025.0642article
AJG 1
Weight
0.37

What the paper says

Nowadays, the “Dual Carbon Goals” refer to the "carbon peak" and "carbon neutral" targets, promoting the use of clean energy and the strategy of sustainable development are gradually being put into effect. Among China’s efforts in tackling climate change and promoting the green transformation is the continuous promotion of environmental, social, and governance (ESG) standards in China’s automobile industry. The research uses listed automotive enterprises in mainland China as a sample to explore the impact of ESG on enterprise financial performance indicators, which are return on equity (ROE) and return on assets (ROA). Mainland Chinese listed auto companies’ data from 2013 to 2023 from the Sino-Securities ESG index and China Securities Market and Accounting Research Database (CSMAR) have been selected, and this research uses the fixed-effects model to analyze the panel data. The empirical evidence reveals that ESG implementation has a statistically significant positive correlation with financial performance. The robustness tests, conducted through control variable exclusion and subsample analysis, show that the influence of ESG performance on financial performance is stronger for state-owned enterprises than for non-state-owned enterprises. This study is significant because it explains the positive relationship between ESG and financial performance and further supports theoretical frameworks, including sustainable development theory, corporate social responsibility theory (CSR), and stakeholder theory. Companies and policymakers can consider the implications of this research.   Key words: Financial performance, mainland China, ESG level, state-owned company.

1 citation

Open paper page →

Cite this paper

https://doi.org/https://doi.org/10.5897/jat2025.0642

Or copy a formatted citation

@article{zhaowen2025,
  title        = {{Environmental, social, and governance (ESG) and financial performance of listed companies in the automotive industry in China}},
  author       = {Zhaowen Wang & Philip L.‐F. Liu},
  journal      = {Journal of Accounting and Taxation},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.5897/jat2025.0642},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Environmental, social, and governance (ESG) and financial performance of listed companies in the automotive industry in China

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.