ESG performance and corporate fraud

•ESG responsibility fulfillment enhancement will inhibit corporate fraud.•The better the ESG responsibility is performed, the less the financing constraint pressure is, and the lower the likelihood of corporate fraud.•The better the fulfillment of ESG responsibilities and the higher the information...

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Bibliographic Details
Published in:Finance research letters 2024-04, Vol.62, p.105212, Article 105212
Main Authors: Li, Dengjia, Ma, Chaoqun, Yang, Jinglan, Li, Hao
Format: Article
Language:English
Subjects:
Corporate fraud
ESG performance
Financing constraints
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Summary:•ESG responsibility fulfillment enhancement will inhibit corporate fraud.•The better the ESG responsibility is performed, the less the financing constraint pressure is, and the lower the likelihood of corporate fraud.•The better the fulfillment of ESG responsibilities and the higher the information transparency, the lower the possibility of company fraud. This paper selects Chinese A-share listed companies as a data sample from 2012 to 2022 to explore the role of ESG performance on corporate fraud. It is found that ESG performance has a significant inhibitory effect on corporate fraud. Regarding mediation channels, ESG performance can effectively inhibit corporate fraud through the mediating roles of alleviating financing constraints and improving information transparency.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2024.105212