• Positive ESG performance significantly enhance firm value. • Investors confidence plays a mediating role between ESG performance and firm value. • This positive relationship is more pronounced among eastern enterprises and non-state-owned enterprises. • ESG sub items are significantly related to firm value, but the effect size of is different. This study explores how environmental, social and governance (ESG) performance impacts firm value of Chinese listed companies from 2009 to 2022 through external market factors. The analysis indicates that positive ESG performance is beneficial for enhancing investor confidence and thereby enhancing firm value. This positive relationship is more pronounced among eastern enterprises and non-state-owned enterprises. ESG sub items are significantly related to firm value, but the effect size of is different. We conclude that the ESG related activities promotes investor confidence, while the impact of sub item activities on firm value presents different characteristics.
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Tang et al. (2024) studied this question.
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