Flight to Environmental, Social, and Governance Transparency: Evidence from Foreign Government Procurement Contracts | Episode No.106

Workshop’s Topic: This study examines whether improved transparency in the areas of environmental, social, and governance (ESG) increases the competitiveness of companies when awarding contracts to foreign governments. Exploiting the staggered introduction of mandatory ESG disclosure requirements across countries, we find that firms in treated countries are more likely to win procurement contracts from foreign governments and higher value contracts after the ESG disclosure mandate than their counterparts in control countries. This effect is more pronounced for green contracts, for suppliers with improved ESG disclosure quality after the mandate, and for purchasing governments with higher ESG awareness. In addition, the effect is stronger when suppliers are exposed to more intense competition. Channel tests suggest that the ESG disclosure mandate influences the global allocation of government procurement through two channels: increased ESG disclosure and improved ESG performance. Our results shed light on the role of ESG transparency in foreign government procurement.

Time and Location: 14:00-17:00 PM (GMT+8), Room A423 (School of Management)

Language: Bilingual (Chinese and English)

Introduction of Speakers

Assist Prof. SUN Chengzhu

Hong Kong Polytechnic University, School of Accounting and Finance

Assistant Professor at the School of Accounting and Finance, Hong Kong Polytechnic University. She received a Masters degree in Environment from the Hong Kong University of Science and Technology in 2016 and a PhD in Accounting from the Hong Kong University of Science and Technology in 2021. During her PhD, she completed study visits at Columbia University. Sun Chengzhu conducts research in information economics, regulation/law and ESG, and teaches a masters program in ESG investment and green finance. She has published several academic papers in leading international journals, including Review of Financial Studies, Accounting Review, Management Science and Contemporary Accounting Research.