Abstract: Existing studies on the determinants of corporate ESG (Environmental, Social, and Governance) performance are primarily based on the assumption of independent decision-making among firms, overlooking potential peer effects embedded in shared ownership networks. Based on this, a sample of Chinese A-share firms in Shanghai and Shenzhen from 2012 to 2022 is selected to examine the existence and mechanisms of peer effects in ESG performance within common ownership networks. The empirical results show that corporate ESG performance exhibits significant peer effects in such networks, and the findings remain robust after a series of endogeneity and robustness tests. Mechanism analysis reveals that these peer effects are mainly driven by information transmission, exit threat, and resource acquisition mechanisms—that is, peer effects are more pronounced when the information transparency of peer firms are lower, when the threat of co-shareholder exit is stronger, and when the demand for firms’ resource acquisition is higher. Further heterogeneity analysis indicates that peer effects are more significant when the common shareholders are institutional investors or hold controlling stakes. Moreover, ESG peer effects are stronger within industry- and region-based common ownership networks. This study enriches the literature on the determinants of corporate ESG performance and provides theoretical implications for listed companies, common shareholders, and policymakers.

Key words: ESG, peer effect, information transmission, exit threat, resource acquisition