Interrelationship and Mutual Influence of Institutional Investment, Corporate Responsibility, and Environmental Management: Evidence from China

The purpose of the study was to establish the interrelations and mutual influence of institutional investment, corporate responsibility, and environmental management by analyzing the influence of institutional investors on corporate social responsibility formation and “green” management development. A multi-stage desk study based on a quantitative approach was designed and implemented. The study used a set of econometric and economic-statistical methods to assess the interconnections and mutual influence of institutional investment, corporate responsibility, and environmental management on the example of the Chinese stock market. The study found that the main drivers of investment growth in ESG are institutional investors’ demand, political incentives, and government-defined listing rules. Conclusions were drawn on the priority importance of introducing corporate, social, and environmental governance practices to increase the investment attractiveness of companies for institutional investors. The study results indicate the need for active development of ESG practices in Chinese companies and determine the development of corporate social responsibility and environmental management as an effective tool to improve companies’ investment attractiveness for institutional investment and ensure sustainable development of companies. The study results are also of interest to academic researchers, including in terms of forming promising directions for further research.