A Study of the Impact of ESG Investments on the Liquidity Risk of Commercial Banks (2024)

Lan Yang ^{* 1}

¹ Shanghai Normal University

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Abstract

ESG investment promotes the high-quality development of China's economy, and at the same time brings risks and challenges to the market. there is a certain contradiction between the long-cycle nature of ESG investment and the liquidity of commercial banks. In this context, how to stimulate commercial banks to take the initiative to improve ESG investment, and how ESG investment will have an impact on the liquidity risk of commercial banks has become an urgent issue to be considered. This paper selects the annual panel data of 37 commercial banks in China from 2009 to 2022, empirically tests the theoretical research hypotheses, and empirically investigates the impact of ESG investment on the liquidity risk of commercial banks by using the dynamic panel system generalised moment estimation (GMM), finally, after the above theoretical analyses and empirical studies, this paper draws the following conclusions: from the medium and long term perspective , ESG investment reduces the liquidity risk of commercial banks. Based on this, it is recommended to improve the information disclosure system and rating system of ESG investment, to promote the benign development of ESG investment in the banking industry, and to facilitate the realisation of China's "dual-carbon" goal.

Keywords

ESG, liquidity risk, GMM, commercial banks

References

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title

Proceedings of the 3rd International Conference on Business and Policy Studies

ISBN (Print)

978-1-83558-281-7

ISBN (Online)

978-1-83558-282-4

Published Date

18 January 2024

Series

Advances in Economics, Management and Political Sciences

ISSN (Print)

2754-1169

ISSN (Online)

2754-1177

DOI

10.54254/2754-1169/71/20241467

Copyright

© 2023 The Author(s)

Open Access

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited