The study analysed 35,175 Chinese A-share firm-year observations from 2015–2024 using standardised Huazheng ESG scores, firm and year fixed effects, clustered errors, multiple audit proxies and SOE/non-SOE comparisons.
Key findings
- A one-SD ESG increase was associated with about 0.18–0.19 percentage points higher ROA and 0.65–0.68 points higher ROE. Effects were stronger in SOEs; fee proxies and Big-4 status did not consistently strengthen ESG effects.
Why this matters globally
The study adds effect magnitudes and ownership context to the ESG debate and cautions that audit proxies may capture engagement complexity as well as assurance quality.
Thai researcher contribution
Maejo University-affiliated researchers contributed an emerging-market analysis of ESG, ownership and audit context in China.
Limitations to consider
Results are limited to listed Chinese firms and one ESG provider. Audit fees are imperfect quality proxies, and residual endogeneity can remain despite IV and GMM analyses.