Abstract/Summary

This chapter explores how institutional investors and managerial engagement influence sustainability assurance, using ESG ratings as a proxy. Based on stakeholder and agency theories, it examines the effects of long-term and short-term investors on sustainability practices and how managerial engagement, measured by managerial shareholdings, moderates these impacts. Data from China's A-share market (2013-2022) with fixed-effects panel analysis was utilized, with robustness checks using Bloomberg ESG ratings confirming the findings. Heterogeneity analysis by firm characteristics and pollution intensity further supports the hypotheses. Results highlight managerial engagement's role in aligning corporate practices with investor expectations, offering insights to enhance sustainability assurance.