The Influence of Firm Size and Institutional Environment on ESG Disclosure - Evidence from Listed Companies in China

Yixi Zhang; Cheang Peck Yeng  Sharon

Environmental, social and governance (ESG) engagement of firms has drawn considerable interest from policymakers and investors. This paper aims to investigate the impact of firm size and institutional environment on the ESG disclosure among listed companies in China. Form the years 2011 to 2021, this study examined a dataset for 11316 firm-year observations of A-share public firms in China. Multiple regression analysis is used to test the research hypotheses. Although according to the Hausman test results (p-value of. 7961), the random effect model is more suitable for this study, the regression results of the three models (ordinary least squares regression, random effect, fixed effect) are relatively consistent. Our findings demonstrate the larger the firm size, the higher the level of ESG disclosure. In addition, our empirical evidences show that the firms have a greater level of ESG disclosure in a better institutional environment. Importantly, our empirical evidences illustrate institutional environment has a moderating effect, strengthening the relationship between firm size and ESG disclosure. This study suggests that a favourable institutional environment should be created to encourage large companies to play the role of industry demonstration and normative effect to improve the level of ESG disclosure. Such evidence can also be used for reference in other emerging markets. Future research could explore the impact of firm profitability, property rights nature, and industry characteristics on ESG practices in different institutional Settings.

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In-Text Citation: (Yixi & Sharon, 2023)
To Cite this Article: Yixi, Z., & Sharon, C. P. Y. (2023). The Influence of Firm Size and Institutional Environment on ESG Disclosure - Evidence from Listed Companies in China. International Journal of Academic Research in Economics and Management and Sciences, 12(2), 130 – 142.

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The Influence of Firm Size and Institutional Environment on ESG Disclosure - Evidence from Listed Companies in China

Yixi Zhang, Cheang Peck Yeng Sharon

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