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ESG performance and stock prices: evidence from the COVID-19 outbreak in China

Business

ESG performance and stock prices: evidence from the COVID-19 outbreak in China

Z. Li, L. Feng, et al.

Discover how ESG performance impacts stock prices during the COVID-19 financial crisis in this insightful study by Zengfu Li, Liuhua Feng, Zheng Pan, and Hafiz M. Sohail. The research reveals significant findings on cumulative abnormal returns and the varying effects of ESG performance across different sectors.

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Playback language: English
Abstract
This paper investigates the role of environmental, social, and governance (ESG) performance in stock prices during the market financial crisis caused by the COVID-19 pandemic using Chinese listed company data and an event-study method. Empirical results suggest that ESG performance significantly increases firms' cumulative abnormal returns and has asymmetric effects during the pandemic. The positive relationship between ESG and stock prices is robust to various checks and is explained by reputation and insurance effects, being more pronounced among firms with low human capital, bad image, and in high-impact regions.
Publisher
Humanities and Social Sciences Communications
Published On
Jul 18, 2022
Authors
Zengfu Li, Liuhua Feng, Zheng Pan, Hafiz M. Sohail
Tags
ESG performance
stock prices
COVID-19
cumulative abnormal returns
financial crisis
Chinese listed companies
reputation effects

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