Study On The Relationship Between Private Equity,ESG And Corporate Value

At present,China’s economy has entered a stage of high-quality development,and the innovation drive has injected strong momentum into China’s economic development.In order to further deepen the reform and cultivate new economic growth points,the Chinese government has formulated a series of measures to promote economic innovation and development.Driven by the policy,private equity investment,as one of the major players in the financial market,unlike traditional financing institutions,not only broadens the access to corporate financing,but also stimulates the vitality of the capital market,which plays an important role in promoting China’s economic development.ESG is an investment concept and evaluation standard that focuses on environmental,social and governance aspects of enterprises,and has become an important issue in the pursuit of green and sustainable development.It has been gaining more and more attention in the process of pursuing green and sustainable development.As the ESG investment concept continues to penetrate into China’s capital market,private equity investment institutions,as an important financial tool,will influence enterprises’ decisions on environmental protection,social responsibility and corporate governance in the process of post-investment management in order to obtain high investment returns,monitor and manage the behavior of enterprises with their shares,and how to add value to enterprises,all these issues These questions deserve further study.In view of this,this thesis constructs a theoretical model of the value-adding effect of private equity investment on corporate value from an ESG perspective,based on the fact that private equity investment provides regulatory services,and empirically investigates how private equity investment affects corporate value.First,this thesis reviews the literature on private equity,corporate value and ESG studied by domestic and foreign scholars,and then introduces the concepts and related theories of private equity,corporate value and ESG.Second,in order to further study the value-added effect of private equity investment on enterprise value,this thesis classifies the actions of private equity investment to maximize its own interests as the regulatory efforts of private equity investment on the basis of bilateral moral model,and sets up the return functions of private equity investment and enterprises by substituting them into the output function and probability function of enterprise projects,and finds that both in the case of complete information or in the case of incomplete information,private equity investment can enhance the returns of corporate projects and eventually enhance the corporate value by strengthening the supervision and management of the enterprise and improving the internal governance of the enterprise.Based on this,this thesis proposes hypotheses around the value-added effect of private equity investment on enterprises from the perspective of ESG.Further,based on the theoretical modeling and theoretical analysis,this thesis examines the mechanism of the value-added effect of private equity investment on enterprises by means of multiple linear regression and machine learning regression models based on the proposed research hypotheses,taking Shanghai and Shenzhen A-share enterprises as the research objects.The research results show that(1)private equity investment is positively related to enterprise value,and it is also found that both the shareholding ratio and the number of joint investment of private equity investment are significantly and positively related to enterprise value.(2)Private equity investment not only positively influences the overall ESG performance of firms,but also positively contributes to corporate governance in the ESG dimension.(3)Both ESG composite performance and corporate governance are positively related to the value of the firm.That is,the better the overall ESG performance or the higher the level of corporate governance,the higher the value of the enterprise.(4)By introducing the mediating effect model,this thesis finds that private equity investment indirectly increases corporate value by improving the level of ESG,i.e.,ESG plays a partial mediating effect between private equity investment and corporate value.In addition,corporate governance,a key component of ESG,also plays a part of the mediating effect.Finally,this thesis makes relevant suggestions based on the relevant research results.