ESG disclosure, Multiple Large Shareholding (MLS), female directors and firm performance: The case of Chinese manufacturing firms

Authors

  • Chai Huanhuan Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.
  • Aziatul Waznah Ghazali Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.
  • Fahmi Ghazali Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.
  • Nur Aima Shafie Accounting Research Institute, Universiti Teknologi MARA, Shah Alam Campus, 40450 Shah Alam, Selangor, Malaysia.
  • Zuraidah Mohd Sanusi Accounting Research Institute, Universiti Teknologi MARA, Shah Alam Campus, 40450 Shah Alam, Selangor, Malaysia.
  • Wan Asma Wan Nasrudin Faculty of Accountancy, Universiti Teknologi MARA, Seremban Campus, 70300 Seremban, Negeri Sembilan, Malaysia.Faculty of Accountancy, Universiti Teknologi MARA, Seremban Campus, 70300 Seremban, Negeri Sembilan, Malaysia.

DOI:

https://doi.org/10.24200/jonus.vol10iss2pp611-633

Abstract

Background and Purpose: In China, rapid industrialisation and economic growth have heightened the scrutiny of corporate Environmental, Social, and Governance (ESG) practices, particularly in the manufacturing industry, which significantly contributes to environmental degradation and social challenges. This study examines the potential advantages of ESG reporting for Chinese manufacturing firms. Additionally, it assesses the role of female directors in moderating the relationship between ESG practices and reporting towards firm performance, offering insights into the importance of gender diversity on corporate boards in promoting sustainable and responsible business practices.

Methodology: This study employs a quantitative approach, utilising publicly available data on ESG reporting and corporate financial performance in Chinese A-share listed manufacturing firms from 2018 to 2022. Financial data and relevant metrics were sourced from the CSMAR and Winds databases. Two regression models were used. The first evaluates the direct relationship between ESG reporting and MLS on corporate financial performance, measured by return on assets (ROA). The second incorporates the moderating effect of female directors on this relationship.

Findings: The study found that ESG reporting positively influences the financial performance of Chinese manufacturing listed companies. Improved ESG performance enhances corporate transparency, reduces information asymmetry, and fosters stakeholder trust. The findings also indicate that female directors significantly moderate the relationship between ESG reporting, MLS, and performance. Their presence strengthens ESG initiatives’ impact.

Contributions: The study provides insights into the relationship between female directors and ESG practices in Chinese firms. It contributes to understanding ethical decision-making and has implications for developing corporate governance policies in China.

Keywords: ESG reporting, firm performance, female directors, gender diversity, corporate governance.

Author Biographies

  • Chai Huanhuan, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.

    Chen Huanhuan was a student at the Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM). During her studies, she undertook coursework and research in economics and management, developing knowledge in areas such as finance, organizational behavior, and strategic planning.

  • Aziatul Waznah Ghazali, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.

    Aziatul Waznah Ghazali holds a Bachelor in Accounting from Universiti Teknologi MARA and a Master’s degree in the same field from University of Strathclyde, Scotland. She obtained another Master’s degree in 2014 and pursue her PhD, which is also in the area of accounting from Kingston University London in 2018. She specialises in quantitative studies involving financial reporting, corporate governance, auditing and financial criminology.

  • Fahmi Ghazali, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia.

    Mohd Fahmi Ghazali holds a PhD in Financial Economics from the University of Science Malaysia. He is a Senior Lecturer at the Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM). His research focuses on gold and safe-haven assets, financial contagion, and quantile regression.

  • Nur Aima Shafie, Accounting Research Institute, Universiti Teknologi MARA, Shah Alam Campus, 40450 Shah Alam, Selangor, Malaysia.

    Nur Aima Shafie is a fellow at Accounting Research Institute, Universiti Teknologi MARA, Shah Alam. She also is a senior lecturer at Faculty of Accountancy of the same university. She holds PhD in Accounting specializing in financial criminology from Universiti Teknologi MARA, Malaysia. Her research interest span corporate governance, financial reporting, risk management and social enterprise.

  • Zuraidah Mohd Sanusi , Accounting Research Institute, Universiti Teknologi MARA, Shah Alam Campus, 40450 Shah Alam, Selangor, Malaysia.

    Zuraidah Mohd Sanusi serves at the Faculty of Accountancy, Universiti Teknologi MARA (UiTM). She is a Director at the Accounting Research Institute, UiTM. She holds a DBA in Accounting from Universiti Kebangsaan Malaysia and accounting degrees from Syracuse University, USA. Her research focuses on auditing, forensic accounting, corporate governance, and enhancing professional competencies.

  • Wan Asma Wan Nasrudin, Faculty of Accountancy, Universiti Teknologi MARA, Seremban Campus, 70300 Seremban, Negeri Sembilan, Malaysia.Faculty of Accountancy, Universiti Teknologi MARA, Seremban Campus, 70300 Seremban, Negeri Sembilan, Malaysia.

    Wan Asma Wan Nasrudin has been serving as a lecturer at Universiti Teknologi MARA (UiTM) for over a decade, teaching courses in financial reporting and taxation. Prior to her full-time appointment at UiTM Negeri Sembilan, she gained part-time teaching experience at UiTM Sabah. She briefly worked as an auditor at KPMG, where she gained initial exposure to the audit profession.

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Published

2025-07-31

Issue

Vol. 10 No. 2: Journal of Nusantara Studies(JONUS)

Section

Articles

How to Cite

ESG disclosure, Multiple Large Shareholding (MLS), female directors and firm performance: The case of Chinese manufacturing firms. (2025). Journal of Nusantara Studies (JONUS), 10(2), 611-633. https://doi.org/10.24200/jonus.vol10iss2pp611-633