Influence of Corporate Sustainability on Ownership Structure: Empirical Evidence from India
DOI:
https://doi.org/10.31674/ijmhs.2026.v10i02.003Abstract
Background: In recent years, shareholders prefer sustainability as a tool for their investment decisions. It has become mandatory for most Indian firms to disclose sustainability practices and publish Sustainability Reports for large companies, as per market capitalisation. Past research shows that corporate sustainability practices are likely to influence profitability positively. On the other hand, ownership structure is one of the key internal governance mechanisms widely considered to mitigate governance problems of firms and impact profitability. Objectives: Against this backdrop, the present study aims to examine the influence of sustainability on the ownership structure of Indian listed companies. Methods: The final sample consists of 214 publicly traded companies from the population of the S&P BSE 500 index, and the study spans a period of seven years, from 2015–16 to 2021–22. Roodman’s (2009) system GMM estimator is used to analyse the data. Results: The results reveal that the composite Environmental, Social, and Governance (ESG) score is negatively associated with foreign ownership while positively associated with institutional and government ownership. It reflects that more institutional and government investments can be attracted by firms having strong sustainability performance. Conversely, foreign investors of the firms do not prefer investments towards sustainability, maybe due to fear of losing short-term gains. The impact of the scores of separate ESG pillars on ownership is also measured. Conclusion: The outcomes can encourage companies to perform sustainability practices to attract more domestic investments. Lastly, some valuable insights are elaborated in this study that policymakers and regulatory authorities can consider.
Keywords:
Corporate Sustainability, ESG Performance, Foreign Ownership, India, Ownership StructureDownloads
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