Research On Impact Of ESG On The Relevance Of Earning Value

The value relevance of earnings refers to the relationship between information of accounting earnings and enterprise value,which reflects the ability of enterprise earnings information to predict future value.It has been concerned by lots of academics since raised by Ball and Brown 1968.The influencing factors of earnings value relevance have been attended by most academic research.In addition to accounting earnings information,the non-financial information is key factor that effect firm value evaluation.It is easy to lead to wrong estimation of enterprise value and reduce the correlation between accounting earnings and firm value relying on the information of accounting earnings to predict the future value of corporation.The key issue studied in this thesis is whether the information of ESG expression could increase the accuracy of accounting earnings’ estimation of the enterprise’s future value,in other words,whether the relevance of the enterprise’s earnings value could be increased by the ESG performance.The new economy enterprises promote economic development relying on information technology.The information asymmetry is a serious issue between information providers and users.The expression of enterprise social responsibilities has drawn public attention because of social ethics taken by artificial intelligence.Meanwhile,It’s more difficult to estimate the value of new economy enterprises,which have high level of R&D investment and innovations.Therefore,this paper research on the differences between old and new economy enterprises that how ESG performance influence on the value relevance of earnings.This paper studies the problem that how ESG performance influence the value relevance of earnings with the data of corporations which listed in A-shares from 2011 to2022 by stata14.0.Firstly,The analysis of multiple linear regression using the model designed by Olhson to test the correlation of ESG performance and the value relevance of earnings;Secondly,exploring the differences of correlation of ESG performance and value relevance of earnings between old and new economic enterprises;Thirdly,exploring the differences of how ESG influence the earning value relevance in different levers of R&D investment.Lastly,this paper explores the influence of ESG and each dimension index on the correlation of earnings value relevance in the differences between heavily polluting and non-heavily polluting enterprises and the enterprises whether owned by country respectively.The research shows that:(1)ESG performance increases the value relevance of earnings.(2)The promotion of ESG performance on earnings value relevance is mainly reflected in new economy enterprises.(3)The promotion effect of environmental responsibility performance and social responsibility performance on earnings value relevance is mainly reflected in new economy enterprises.The impact of corporate governance responsibility performance on earnings value relevance is not significantly different between new and old economy enterprises.(4)ESG and E S performance has prompt the firm earning value relevance which has high R&D investment.And it’s not significantly differently about governance performance.(5)ESG and E S G performance increases the earnings value relevance of non-heavily polluted enterprises and decreases the earnings value relevance of heavily polluted enterprises.(6)ESG performance and environmental responsibility performance increase the earnings value relevance of state-owned corporations.And the performance of social responsibility increases the earnings value relevance of non-state-owned corporations.Corporate governance responsibility performance has same influences in enterprises whether it owned by country about earnings value relevance.The main innovations are as follows: It is try to incorporate ESG performance as a factor affecting valuation into the research on the value relevance of earnings.It is try to more accurately observe the heterogeneity of economic subject characteristics affected by ESG using the threshold regression method with the threshold of R&D investment.Therefore,it could distinguish the differences between the impact of ESG performance on the value relevance of earnings in the new economy and the old economy.