ESG Performance of Listed Companies and Shareholding Preference of Institutional Investors

The relationship between ESG performance and institutional investors' shareholding preference needs to be further studied as ESG investment concept has received wide attention and recognition in international capital markets. In this paper, the relationship and mechanism of ESG performance, institutional investors and their heterogeneity are empirically analysed by taking Shanghai and Shenzhen A-share listed companies from 2010 to 2020 as research sample. Preliminary shows that institutional investors of Chinese A-share listed companies have ESG responsibility preferences. Moreover, through the study of heterogeneous institutional investors, it is shown that independent institutional investors and long-term stable institutional investors have more significant ESG performance preference than non-independent and short-term trading institutional investors. Further research found that corporate R&D investment had a negative moderating effect on the relationship between ESG performance and institutional investors' shareholding. Therefore, this paper recommends promoting the standardization of ESG performance ratings; guiding the transformation of ESG strategies of listed companies; cultivating ESG literacy among investors; and strengthening the adaptation of ESG concepts to China's capital market to lead the sustainable development concepts and actions of capital market players