ESG performance and corporate financial performance in China: Moderating effects of analyst and media attention

Economic policy uncertainty has a profound impact on firms’ investment decisions, mainly in terms of increased risk and uncertainty for firms when planning future investments. This study aims to explore the impact of corporate economic policy uncertainty on corporate investment, as well as how corporate social responsibility disclosure moderates the relationship between economic policy uncertainty (EPU) and corporate investment. The analysis uses a sample of Chinese listed companies from 2010 to 2022, including 33,791 observations. The study uses ordinary least squares (OLS) regression with clustered standard errors. The basic and robust regression empirical results show that economic policy uncertainty has a negative impact on corporate investment. However, corporate social responsibility plays an important moderating role between them. The two-stage least squares method (2SLS) is used to solve the endogeneity problem of reverse causation. The heterogeneity results show that economic policy uncertainty significantly dampens business investment, while corporate social responsibility (CSR) is effective in mitigating this negative effect, especially among non-state-owned and low-cash-flow firms, where this moderating effect is more pronounced. The study concludes that as corporate social responsibility disclosure enhances information transparency and investor confidence, companies should prioritize CSR programs that ultimately help companies remain competitive and attractive to investors in volatile markets. Meanwhile, this also highlights the strategic importance of CSR in mitigating external risks, such as those presented through volatile economic policies.

This study highlights the complexity of the relationship between sustainability performance, environment, social and governance (ESG) reporting, and tax aggressiveness, which is a critical concern amidst the increasing demands for corporate social accountability. Companies in Indonesia and Malaysia, especially those in the non-financial sector, face increasing regulatory pressure to meet ESG standards. This study uses 263 Indonesian and 311 Malaysian companies as samples because both countries are prominent emerging markets in Southeast Asia with fast-growing economies, diverse industries, and abundant natural resources. However, aggressive tax avoidance remains a common strategy to maintain financial flexibility. This study aims to examine whether companies with high ESG performance tend to reduce tax avoidance practices or use it as a strategy to cover ESG costs. Through 2SLS regression analysis on 2012–2021 data, the results show that ESG performance has a significant positive effect on tax aggressiveness, where companies with high ESG performance also tend to engage in tax avoidance to cover ESG costs. Conversely, tax aggressiveness positively affects ESG performance because companies increase ESG engagement to reduce reputational risks from aggressive tax practices. The simultaneous test found a reciprocal relationship between the two variables with an R² value of 29.4% for tax aggressiveness and 63.1% for ESG performance. This study suggests stricter regulations to reduce tax avoidance in companies with high ESG performance and provides insights for policymakers in Southeast Asia.

This study aims to examine the direct and indirect impact of IFRS adoption on the financial performance of Moroccan companies listed on the Moroccan financial market. The analyses are based on data drawn from the financial statements of 21 Moroccan companies listed on the Casablanca Stock Exchange. By measuring financial performance using three stock market measures, namely the Mariss ratio, the Price Earnings Ratio, and the Tobin Q ratio, and using the structural equation method with SPSS AMOS software, the results indicate that before the introduction of the cost of capital variable, IFRS significantly affect financial performance, with an estimated coefficient of 0.395 significant at the 5% threshold. By introducing the cost of capital variable, the results show that the direct and significant relationship between IFRS and performance disappears, recording an estimated coefficient of 0.241 with a non-significant probability level of 0.243. On the other hand, the results show that the estimated coefficients for the indirect effect of IFRS on financial performance are negative, i.e., a coefficient of –0.099 estimating the direct effect of IFRS on the cost of capital and a coefficient of –2.621 estimating the direct effect of the cost of capital on financial performance, significant at the 1% and 5% thresholds, respectively. This confirms the hypothesis that the transition to IFRS indirectly and totally influences financial performance via the cost of capital variable.