An Empirical Study On The Relationship Between ESG Performance And Corporate Investment Efficiency

In terms of carbon neutrality,ESG,the investment strategy comprehensively considered by social and economic entities from the three aspects of environment,social responsibility and governance,which is a powerful tool for the successful implementation of the "double carbon" goals that many scientists and many academics are currently focusing on.Faced with external management constraints such as business regulation,product market competition,and mass media scrutiny,listed companies in China hope to achieve green and low-carbon transformation through ESG.In addition,investment decisions are core decisions related to company value.The efficiency of capital allocation and investment efficiency has a pivotal impact on the effective operation of the company itself and the whole market.The impact of existing literature on ESG and investment efficiency is still focused on improving the internal control of the company.Therefore,from the perspective of external pressure,this paper studied the impact of monetary policy inclusion,the competition in trade and the regulation of the media on the impact of ESG investments,and puts forward suggestions for enterprises to improve ESG practice and improve investment efficiency in the face of external pressure.The paper uses investment-related theories,stakeholder theories,resource dependence theories and theories related to competitive role mechanisms in product markets as a theoretical framework;firms registered in the Chinese markets of Shanghai and Shenzhen between 2014 and 2021 are studied,and the theory proposed by Richardson(2006)was followed to measure investment performance and to select appropriate control variables that affect investment performance.A regression model is developed to analyze the relationship between ESG indicators and investment performance.In addition,monetary policy uncertainty,Herfindahl index and media monitoring are introduced as moderating variables to investigate the regulatory effect of external pressure on the bond connection between ESG and investment performance.Research shows that there is a positive correlation between ESG efficiency and investment efficiency.Good ESG performance may prevent the management from making inefficient investment decisions,such as net present value below 0.The serious uncertainty of monetary policy and fierce competition in commodity markets may improve the positive correlation between ESG indicators and investment performance.High level of media supervision reduces the positive correlation between ESG indicators and investment performance.Heterogeneity analysis found that when the ownership of a company is not a state-owned enterprise,robust institutional investors and higher analysts’ attention,when the nature of corporate property rights is non-stateowned enterprises,institutional investors are transactional investors,and analysts attention is low,ESG performance has a significant positive correlation with corporate investment efficiency.Against the background of the low level of ESG practice of Chinese enterprises,external pressures such as media supervision,institutional investor participation and analyst tracking are not necessarily effective mechanisms to improve the internal governance of companies.