Work

Eyes on the Ground: Can Institutional Investor Site Visits Discipline Corporate ESG Hypocrisy?

Year: 2026

Type: article

Abstract: ABSTRACT This paper investigates whether institutional investor site visits serve as an effective external governance mechanism for curbing environmental, social and governance (ESG) hypocrisy. Using panel data on Chinese A‐share listed firms from 2012 to 2021, we find that site visits significantly reduce ESG hypocrisy by improving internal control quality and alleviating financing constraints. This disciplinary effect is strengthened by investment–financing maturity mismatch and analyst coverage. Heterogeneity analyses further show that the effect is more pronounced when firms are visited by independent institutional investors, operate in regions with stronger investor protection, belong to less competitive industries, are non‐state‐owned and do not experience executive turnover. These findings highlight the governance role of on‐site external oversight in mitigating less visible strategic behaviours such as ESG hypocrisy.

Source: Business Strategy and the Environment

DOI: 10.1002/bse.71448

Authors: Lichun Zheng, Wenjia Tang, Liang Zhao, Salwa Saleh Almasabi, David Kalisz

Institutions: Changchun University, Jilin University, University of Strathclyde, Princess Nourah bint Abdulrahman University, Excelia Business School

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,480

Funder: Princess Nourah Bint Abdulrahman University