ESG Performance, Demographic Trend, and Labour Investment Efficiency in China

This paper takes Chinese A-share listed companies from 2011 to 2019 to study the impact of ESG performance on labour investment efficiency under the new demographic trend. The results show that good ESG performance improves labour investment efficiency in China. Fast population ageing, the gradual balance of gender structure, and the improvement of education levels in the Chinese workforce have promoted the positive impact of ESG performance on labour investment efficiency in the past decade. We further find ESG significantly impacts both labour over investment and under investment. Good ESG performance can not only alleviate the waste of human capital but also mitigate the problem of labour shortage.