The Moderating Role of Company Age in the Relationship between ESG Performance and Firm Value in Chinese Transportation Equipment Manufacturing Firms

Abstract

This paper investigates the moderating effects of company age on the relationship between ESG performance and firm value, focusing on Chinese transportation equipment manufacturing firms. It comprehensively analyzes the impact of ESG on corporate value by considering both integrated ESG scores and individual ESG factor scores. The research findings reveal a positive influence of ESG on firm value. Specifically, the environmental and social dimensions of ESG demonstrate a positive impact on firm value, whereas the governance dimension exhibits a negative effect. Notably, the moderating role of company age is evident in the relationship between overall ESG performance and firm value, as well as the relationship between environmental performance and firm value, both showing a negative moderating effect. However, in the case of the relationships between social performance and governance performance with firm value, company age does not appear to play a significant moderating role. Furthermore, the study highlights the negative moderating effect of company age on the relationship between overall ESG performance and firm value, suggesting that younger firms positively influence corporate performance through more proactive engagement in ESG activities compared to their older counterparts.