THE IMPACT OF ESG PERFORMANCE ON FIRM FINANCIAL PERFORMANCE: EVIDENCE FROM CHINESE LISTED MANUFACTURING FIRMS
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https://doi.org/10.5281/zenodo.20690821##semicolon##
ESG performance, Return on Assets (ROA), China, manufacturing, panel data, Stakeholder Theory, emerging markets##article.abstract##
The study investigates the relationship between Environmental, Social, and Governance (ESG)
performance and firm financial performance among publicly listed manufacturing companies in China over the
period 2020-2024. Using panel data from 40 firms listed on the Shanghai and Shenzhen Stock Exchanges, the
research applies Fixed Effects panel regression to examine whether ESG performance, measured by Refinitiv
ESG scores, significantly affects firm profitability as captured by Return on Assets (ROA). Firm size and leverage
are included as control variables. The results show a positive and statistically significant association between
ESG scores and ROA, suggesting that Chinese manufacturing firms with stronger sustainability practices tend
to achieve higher profitability. The findings are consistent with Stakeholder Theory and the Resource-Based
View of the firm. This study contributes to the growing empirical literature on ESG in emerging markets and
offers practical guidance for corporate managers, investors, and policymakers
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