Can restrictive green financial policies enhance enterprise value? The mediating role of ESG performance

Zihao Wang; Jun Huang; Shizhu Tang; Renjie Luo; Hancheng Huang

doi:10.1080/13504851.2025.2482005

Can restrictive green financial policies enhance enterprise value? The mediating role of ESG performance

Zihao Wang, Jun Huang^*, Shizhu Tang, Renjie Luo, Hancheng Huang

^*Corresponding author for this work

Department of Accountancy, Economics and Finance

Research output: Contribution to journal › Journal article › peer-review

Abstract

This study employs a difference-in-differences (DID) methodology to investigate the impact of restrictive green financial policy (GFP) on the enterprise value of Chinese A-share listed companies between 2018 and 2023. The findings indicate that the restrictive GFP introduced in 2022 significantly enhances the enterprise value of companies with low ESG ratings. Furthermore, ESG performance mediates the relationship between restrictive GFP and enterprise value. This study contributes to the literature on the interplay between GFP and ESG by providing novel insights into the influence of restrictive GFP on enterprise value.

Original language	English
Pages (from-to)	1-5
Number of pages	5
Journal	Applied Economics Letters
DOIs	https://doi.org/10.1080/13504851.2025.2482005
Publication status	E-pub ahead of print - 26 May 2025

User-Defined Keywords

ESG
ESG performance
Green financial policy
enterprise value

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1080/13504851.2025.2482005

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title = "Can restrictive green financial policies enhance enterprise value? The mediating role of ESG performance",

abstract = "This study employs a difference-in-differences (DID) methodology to investigate the impact of restrictive green financial policy (GFP) on the enterprise value of Chinese A-share listed companies between 2018 and 2023. The findings indicate that the restrictive GFP introduced in 2022 significantly enhances the enterprise value of companies with low ESG ratings. Furthermore, ESG performance mediates the relationship between restrictive GFP and enterprise value. This study contributes to the literature on the interplay between GFP and ESG by providing novel insights into the influence of restrictive GFP on enterprise value.",

keywords = "ESG, ESG performance, Green financial policy, enterprise value",

author = "Zihao Wang and Jun Huang and Shizhu Tang and Renjie Luo and Hancheng Huang",

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AU - Wang, Zihao

AU - Huang, Jun

AU - Tang, Shizhu

AU - Luo, Renjie

AU - Huang, Hancheng

PY - 2025/5/26

Y1 - 2025/5/26

N2 - This study employs a difference-in-differences (DID) methodology to investigate the impact of restrictive green financial policy (GFP) on the enterprise value of Chinese A-share listed companies between 2018 and 2023. The findings indicate that the restrictive GFP introduced in 2022 significantly enhances the enterprise value of companies with low ESG ratings. Furthermore, ESG performance mediates the relationship between restrictive GFP and enterprise value. This study contributes to the literature on the interplay between GFP and ESG by providing novel insights into the influence of restrictive GFP on enterprise value.

AB - This study employs a difference-in-differences (DID) methodology to investigate the impact of restrictive green financial policy (GFP) on the enterprise value of Chinese A-share listed companies between 2018 and 2023. The findings indicate that the restrictive GFP introduced in 2022 significantly enhances the enterprise value of companies with low ESG ratings. Furthermore, ESG performance mediates the relationship between restrictive GFP and enterprise value. This study contributes to the literature on the interplay between GFP and ESG by providing novel insights into the influence of restrictive GFP on enterprise value.

KW - ESG

KW - ESG performance

KW - Green financial policy

KW - enterprise value

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JO - Applied Economics Letters

JF - Applied Economics Letters

ER -

Can restrictive green financial policies enhance enterprise value? The mediating role of ESG performance

Abstract

User-Defined Keywords

UN SDGs

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