Beyond Ownership: ESG Spillovers and Corporate Governance in Asian Business Groups — a Systematic Review

Abstract

Business groups and family businesses remain a key business structure in Asia, characterized by pyramidal ownership, cross-shareholding, and control by the founding family or major shareholder. This structure presents both strategic advantages and governance risks. Over the past decade, environmental, social, and governance (ESG) concepts have been driven by institutional investors, international regulations, and societal pressures, making transparency and stakeholder accountability issues increasingly important. However, most research still focuses on ESG disclosure and financial impacts at the individual company level, while the issue of ESG spillover within business groups has not been systematically reviewed. This study aims to review and synthesize the existing body of knowledge related to ESG spillovers and corporate governance mechanisms within Asian business groups, as well as to identify key spillover mechanisms, contextual differences, and research gaps in the literature. This research conducted a systematic literature review covering 65 peer-reviewed academic articles between 2010 and 2025 from the Scopus, Web of Science, and SSRN databases. Thematic content analysis was used to study the research trends, thematic patterns, and knowledge development related to types of business groups (Chaebol, Keiretsu, Family Business Groups), theoretical frameworks (Agency Theory, Resource Dependence Theory, Institutional Theory), diffusion mechanisms (reputation, shared resources, governance, and regulatory pressure), and contextual differences across countries. This review also develops an analytical framework explaining how governance structures, institutional pressures, and ownership concentration shape ESG spillover outcomes within Asian business groups. The synthesis results revealed that ESG practices of parent companies can create positive spillovers to subsidiaries, such as enhancing disclosure quality, reducing capital costs, and increasing stakeholder confidence. At the same time, negative spillovers that may lead to greenwashing, benefit diversion, and reputational risk transmission were also found. The study also highlights differences across national contexts. Countries with relatively strong regulatory and institutional pressures (China, Malaysia, and the GCC countries) tend to exhibit clearer positive ESG spillover outcomes, while countries with less mature regulatory systems (Bangladesh, Pakistan, and Vietnam) are more likely to demonstrate mixed or inconsistent outcomes. This study also addresses knowledge gaps, including the classification of positive and negative spillovers, the use of multi-level analysis, and qualitative studies to understand the dynamics within business groups. This research contributes significantly to the development of a conceptual framework for ESG spillovers in the Asian context, with recommendations for empirical research, regulatory mechanism improvements, and future policymaking. This study provides three key contributions: (1) it is the first systematic review that categorizes ESG spillovers into positive and negative forms within Asian business groups, (2) it develops a multi-level conceptual framework emphasizing governance, institutional pressure, and ownership structure, and (3) it synthesizes cross-country differences, highlighting how regulatory intensity shapes spillover outcomes.