Party Organization Governance and ESG Performance of Private Enterprises: Evidence Based on “Opinions” Policy

In order to investigate how nonpublic party building policies practices affect the environmental, social and governance (ESG) responsibilities of private corporations with different levels of party building and its mechanism of action, this article selects data from private enterprises listed on A-shares in the period of 2009–2023 as a sample, and constructs a difference-in-differences model using the Opinions on Strengthening and Improving the Work of Party Building in Nonpublic Enterprises (for Trial Implementation) issued by China in 2012 as a quasi-natural experiment. The results show that the adoption of the Opinions improves the ESG performance of businesses with higher levels of party building more significantly, which is mainly realized through three mechanisms: alleviating corporate financing constraints, enhancing corporate information transparency and increasing the level of green investment. In addition, the heterogeneity analysis demonstrates that the policy’s improvement effect on corporate ESG performance is more significant among firms with less internal control, in more competitive markets, in heavy pollution industries and in firms with lower investor shareholdings.