Antai College of Economics and Management, Shanghai Jiao Tong U., China
Capital can be used differently – either generating more profits or bringing higher welfare. Dynamics behind companies’ leveraging these two subjects are complex yet meaningful. Therefore, this study examines the influence of private equity (PE) and venture capital (VC) ownership on workforce ESG performance, focusing on employee health & safety, diversity, and training & development. We argue that the difference in incentive structure will yield diversified results. We test our hypotheses using a comprehensive dataset of 14,287 publicly listed companies. Our findings confirm an inverted U-shaped relationship is identified, where moderate PE/VC ownership can promote ESG workforce, but higher levels often prioritize efficiency at the expense of ESG outcomes. By addressing the underexplored employee dimension of ESG, the differentiated effects of PE/VC ownership, and the antecedents of HRM practices, this study contributes to ESG, PE/VC investor, and strategic HRM literature.
