Cross-ownership and corporate ESG investment: Promotion or suppression?

Environmental, social, and governance (ESG) investing is the new mainstream of sustainable development in the "dual-carbon" era and serves as a crucial indicator for assessing enterprises' high-quality development. Cross-ownership, as an important participant in the capital market, significantly influences corporate business decisions. However, whether the impact of cross-ownership on corporate ESG investment manifests as a synergistic governance effect or competitive collusion effect is a vital question. This study empirically investigates the impact of cross-ownership on ESG investment, using listed companies in heavily polluting industries from the Shanghai and Shenzhen A-shares between 2015 and 2022 as the research sample. The findings reveal that cross-ownership positively influences corporate ESG investment by reducing information asymmetry, alleviating financing constraints, and enhancing corporate governance. This research not only expands the theoretical understanding of cross-ownership and corporate ESG investment but also offers empirical guidance for improving corporate governance mechanisms and attaining sustainable development.