Who cares about environmental, social and governance performance? Family versus non-family firms

Purpose This paper aims to explore the nexus between family involvement and environmental, social and governance (ESG) performance based on socioemotional wealth theory, and it also analyzes the potential influence mechanism. Design/methodology/approach Based on the categorization of China Stock Market & Accounting Research database, this study divides the Chinese listed firms into family and nonfamily firms and applies multiple regression methods to test the theoretical hypotheses. Findings Family involvement can incentivize corporations to enhance corporate transparency, which can in turn enhance their ESG performance. The role of family involvement in bolstering corporate ESG performance is negatively contingent on external financing constraints. Originality/value There are insufficient studies on the nexus between family ownership and ESG performance. The findings provide insights into helping policymakers formulate targeted measures to encourage corporations to be more active in promoting ESG initiatives.