Parent‒Child Cogovernance and Corporate ESG Performance: Evidence from China

Motivated by the research gap in parent-child intergenerational succession, this study adopts a stakeholder perspective and utilizes data from listed family firms in China spanning from 2010 to 2021 to explore the influence of parent-child cogovernance on corporate ESG performance. The findings reveal a significant positive relationship between parent-child cogovernance and corporate ESG performance, with this effect becoming more pronounced as parent-child cogovernance deepens. Furthermore, our analysis identifies "paternalistic care" and "reducing agency costs" as crucial mechanisms through which parent-child cogovernance enhances ESG performance. Importantly, the impact of parent-child cogovernance is particularly notable in firms characterized by lower first-generation control, limited political connections, and weaker external governance. The robustness of our results is confirmed through various methodological approaches including two-stage least squares estimation (2SLS), Heckman two-stage estimation, propensity score matching (PSM), and staggered difference-in-difference (DID) analysis. This study contributes significantly to the literature on intergenerational succession and corporate ESG performance.