Political connection and corporate ESG performance: Evidence from China
Political connection and corporate ESG performance: Evidence from China

Summary/Abstract: ESG has attracted widespread attention in China’s capital markets. This study investigates the impact of corporate executives’ political connections on firms’ ESG performance in China. Using panel data from A-share listed companies between 2009 and 2022, this study empirically tests whether politically connected executives influence ESG ratings. The results show a significant positive association between political connections and ESG scores. Mechanism analysis reveals that such connections improve ESG performance by enhancing media scrutiny, alleviating financing constraints, and increasing access to government subsidies. To address endogeneity concerns, we employ Two-Stage Least Squares (2SLS) regression, confirming the robustness of the findings. These results highlight the role of political capital in promoting sustainable corporate practices.

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