Do state-owned institutional investors care more about ESG? Evidence from China

Abstract

This article examines the question of whether state-owned institutional investors are more likely to incorporate ESG in their investment or voting decisions compared with other types of institutional investors. Using Chinese A-shares data, this article reveals that the ESG scores of listed corporations positively correlate with the shareholdings of state-owned and foreign institutional investors, after controlling for the aggregate shareholdings of all institutional investors. These findings suggest that in China, state-owned institutional investors play a leading role in promoting ESG performance, which deepens our understanding of ESG practice in China and generates important policy implications.