Accredited hidden champion support and corporate ESG performance: evidence from China
研究政府支持的认证隐形冠军如何影响企业ESG表现，发现认证企业因获得银行信贷和客户忠诚度提升以及外部监督加强而表现更好。
We examine how support from the government for accredited hidden champions (accredited HCs) impacts corporate ESG engagement. Accredited HC is a firm that exhibits world-market leadership in its niche market. Based on a sample of Chinese listed firms over 2011–2020 and using a difference-in-differences (DID) method, we show that HCs accredited by the government, on average, exhibit better ESG performance than non-accredited firms. We consider two possible explanations for these findings: (1) a certification effect through which government support reveals an accredited HC firm is of better quality, which leads to better access to bank loans and customer loyalty; and (2) a monitoring effect through which government support brings more external attention and monitoring, such as more analysts following, to the accredited HC firm. Our empirical results support these two effects.