Resilience of private enterprises and ESG performance: Evidence from the Chinese financial industry

Abstract

Environmental, Social, and Governance (ESG) factors have steadily grown in 
importance as measures of businesses' overall success in recent years. In order to show how 
ESG performance affects private firms' resilience, this research builds a signaling model. 
Using data from China's Shanghai and Shenzhen A-shares listed private companies from 
2009 to 2022, it also looks at how ESG performance impacts the resilience of private 
businesses. A number of endogeneity tests and robustness analysis support the fundamental 
result that strong ESG performance considerably increases business resilience. According to 
the mechanism analysis, ESG performance may improve the resilience of private businesses 
by attracting investment, securing government subsidies, and easing financial restrictions. 
The transmission mechanism of ESG performance on the resilience of private firms is 
revealed in this study, which also enhances research on ESG performance and offers 
empirical evidence for policy makers and enterprise managers to improve the overall 
sustainability and resilience of private enterprises.