{"title":"How financial derivatives affect energy firms' ESG","authors":"Mengxu Xiong , Chen Liu , Junyi Xiang","doi":"10.1016/j.eneco.2024.108028","DOIUrl":null,"url":null,"abstract":"<div><div>This paper investigates how the usage of financial derivatives affect energy firm's ESG. Using a sample of Chinese listed energy firms, we document a positive relation between the financial derivatives usage and corporate ESG performance, and the results remain robust under a series of robustness and endogeneity tests. Alleviated financial pressure, enhanced information efficiency and increased risk exposure are potential mechanisms through which financial derivative usage promotes ESG performance. Moreover, the influence of financial derivatives exhibits heterogeneity, and the improvement of corporate ESG performance is more pronounced for state-owned enterprises, large firms, firms receive more investor attention, and firms located in the eastern region in China. Our study may shed lights on the impact of financial derivatives usage on energy firm's sustainable development.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"140 ","pages":"Article 108028"},"PeriodicalIF":13.6000,"publicationDate":"2024-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Energy Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0140988324007370","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper investigates how the usage of financial derivatives affect energy firm's ESG. Using a sample of Chinese listed energy firms, we document a positive relation between the financial derivatives usage and corporate ESG performance, and the results remain robust under a series of robustness and endogeneity tests. Alleviated financial pressure, enhanced information efficiency and increased risk exposure are potential mechanisms through which financial derivative usage promotes ESG performance. Moreover, the influence of financial derivatives exhibits heterogeneity, and the improvement of corporate ESG performance is more pronounced for state-owned enterprises, large firms, firms receive more investor attention, and firms located in the eastern region in China. Our study may shed lights on the impact of financial derivatives usage on energy firm's sustainable development.
期刊介绍：
Energy Economics is a field journal that focuses on energy economics and energy finance. It covers various themes including the exploitation, conversion, and use of energy, markets for energy commodities and derivatives, regulation and taxation, forecasting, environment and climate, international trade, development, and monetary policy. The journal welcomes contributions that utilize diverse methods such as experiments, surveys, econometrics, decomposition, simulation models, equilibrium models, optimization models, and analytical models. It publishes a combination of papers employing different methods to explore a wide range of topics. The journal's replication policy encourages the submission of replication studies, wherein researchers reproduce and extend the key results of original studies while explaining any differences. Energy Economics is indexed and abstracted in several databases including Environmental Abstracts, Fuel and Energy Abstracts, Social Sciences Citation Index, GEOBASE, Social & Behavioral Sciences, Journal of Economic Literature, INSPEC, and more.
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