Review Reports

Round 1

Reviewer 1 Report

The paper is overall well structured and interesting. The research focuses on evaluating the impact of environment (E), society (S) and corporate governance (G) on the corporate financial performance in China. Specifically, the research investigates whether ESG has a positive impact on the financial performance of a sample of 191 listed companies in the Yangtze River Delta of China from 2015 to 2020. Results show that (E) has a significant negative impact on the corporate financial performance, (G) has a significant positive impact, (S) has no significant impact. The research has elements of originality because ESG compliance has recently been given attention by the Chinese government, which issued new rules of conduct for listed companies in 2017 and 2018. The subject treated with reference to the Chinese context is not yet sufficiently developed and fills the existing gap in the literature.

Compared to the existing literature, the research considers the three aspects of ESG separately to construct the ESG index system. Regarding the selected compion, the Yangtze River Delta companies have a central position and demonstrative effect in the national economy, so testing the effect on them is useful to understand the overall impact on the Chinese economy.

The methodology adopted is adequate. The controls applied and the variables adopted are explanatory of the phenomena analysed.

The conclusions answer the main question posed.

In view of the growing trend in ESG studies, I recommend the following papers among others to update the bibliography: Galletta, S., Mazzù, S., & Naciti, V. (2022). A bibliometric analysis of ESG performance in the banking industry: from the current status to future directions. Research in International Business and Finance, 101684. Zhou, G., Liu, L., & Luo, S. (2022). Sustainable development, ESG performance and company market value: Mediating effect of financial performance. Business Strategy and the Environment. Chen, Z., & Xie, G. (2022). ESG disclosure and financial performance: Moderating role of ESG investors. International Review of Financial Analysis, 83, 102291. No additional comments

 

Author Response

Thank you very much for your praise, encouragement, valuable appraisal and comments. The several papers you mentioned are very good and we have studied carefully. It's very helpful for the improvement of these articles and the expansion of the follow-up research ideas. These papers also have been added to the Literature Review and the list of Reference. 

Reviewer 2 Report

This research focuses on evaluating the impact of environment, society, and corporate governance on corporate financial performance in China

In my opinion, it is a good paper. The aim of the paper is clear it will cover the existing gap. Literature review is enough. Methodology variables and clearly defined. Results and discussion of the empirical application improves the value of the paper

Some minor aspects need to be improved before the publication:

What’s ST in line 234?

links of lines 239-240 don’t work

Avoid title sections with a single letter (lines 261, 273, 304)

Line 342: “based on the scores of experts”, Are they obtained from a survey or a reference? Explain it better

Numbers of table 1 (1), (2), … can be confused with expression numbers

In the model specification, the author does not explain why he uses two expressions for ROA and two for TOBIN Q

The first line of table 3 is confusing

Author Response

We very much appreciate your careful reading of our manuscript and valuable appraisal and comments. We have carefully considered the comments and have revised the manuscript accordingly, and point by point. Thank you very much for your efforts so that we might improve our work adequately. Please check the details of the responses attached to the file. Any further guidance you can provide us will be greatly appreciated.

Author Response File: Author Response.pdf

Reviewer 3 Report

The paper examines the importance of ESG and each of its components on firm performance, focusing on a region in China. The overall topic is justified and paper reads well most of the time. I have some comments for authors to address:

1. ESG data can be described where data is explained - here use graphs to summarise the ESG and its components overtime. Also, descriptive statistics should be provided and explained.

2. Empirical models fully or partially used can be linked with previous studies.

3. There has been an influx of studies on ESG along the same line - what is new here?

4. Result discussion can be clarified with some evidence as well.

5. Are the results robust to different firm size and different sectors? Refer to previous studies to build some robustness tests.

6. Justification of looking at the E, S, G separately needs to be made especially when in reality they are bundled as ESG.

Author Response

We very much appreciate your careful reading of our manuscript and valuable appraisal and comments. We have carefully considered the comments and have revised the manuscript accordingly, and point by point. Thank you very much for your efforts so that we might improve our work adequately. Please check the details of the responses attached to the file. Any further guidance you can provide us will be greatly appreciated.

Author Response File: Author Response.pdf

Round 2

Reviewer 3 Report

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