Corporate sustainability performance, stock returns, and ESG indicators: fresh insights from EU member states

Ye, Changyou; Song, Xiaowei; Liang, Yu-He

doi:10.1007/s11356-022-20789-8

“…For example, a mandatory ESG disclosure regime can improve nancial transparency, as found by Nair et al (2019). Additionally, a positive impact of mandatory NFD on CFP was con rmed by empirical studies from China, India, and Europe (Bhattacharyya and Rahman, 2019;Jiang et al, 2022;Nair et al, 2019;Ye et al, 2022;Yuan et al, 2022). Conversely, some studies report negative causality.…”

Section: Introductionmentioning

confidence: 91%

Can nonfinancial disclosure (NFD) benefit companies? - Evidence from the 2016 Hong Kong “Comply or Explain” mandatory environmental, social, and governance (ESG) disclosure policy

Xu,

Kaneko,

Goto

2023

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This empirical study investigates whether mandatory nonfinancial disclosure (NFD) impacts financial performance using the Hong Kong 2016 “Comply or Explain” mandatory ESG disclosure policy. We use a total of 4712 observations from balanced panel data obtained from combined sources: Refinitiv and manually collected databases from 2013 to 2020. We employ the difference-in-difference (DID) as an identification strategy to explore the average treatment effect on the treated (ATET) of mandatory ESG disclosure policy. The treatment group is dual-listed companies (A/H shares) from Hong Kong, and the control group is domestic-list-only companies (A shares) from Mainland China. The results suggest that a mandatory ESG disclosure policy positively affects corporate financial performance (Tobin’s Q). From heterogeneity analysis, we also find that mandatory disclosure varies across ownership status, economic development regions and industrial sectors. We find that Hong Kong’s 2016 "Comply or Explain" mandatory ESG disclosure policy positively impacts corporate financial performance. Our findings demonstrate the effectiveness of regulatory-driven nonfinancial information disclosure on corporate financial performance.

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“…There is a positive relationship between GDPG rate and emissions suggesting that the E component of the ESG model does not improve the economic growth [19]. In EU there is a negative relationship between ESG and GDPG [20].…”

Section: ) Literature Reviewmentioning

confidence: 96%

The Role of GDP Growth in the ESG Approach at World Level

Leogrande¹,

Costantiello²

2023

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We analyze the question of GDP Growth-GDPG rate in the context of Environmental, Social and Governance-ESG framework. We use World Bank data for 193 countries in the period 2011-2020 using different econometric techniques i.e., Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled Ordinary Least Squares-OLS. We found that GDPG rate is positively associated, among others, to “Government Effectiveness” and “Prevalence of Undernourishment” and negatively associated among others to “Unemployment” and “Research and Development Expenditure”. Furthermore, we have applied the k-Means algorithm optimized with the Elbow method and we found the presence of four clusters in the sense of GDPG rate. Finally, we confront eight machine learning algorithms to predict the value of GDPG rate and we found that the Polynomial Regression is the best predictor. The Polynomial Regression predicts an increase of GDPG rate equal to 2.88% on average for the analysed countries.

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“…There is a positive relationship between GDPG rate and 𝐶𝑂 2 emissions suggesting that the E component of the ESG model does not improve the economic growth (Ho et al, 2019). In EU there is a negative relationship between ESG and GDPG (Ye et al, 2022).…”

Section: Esg and Gdpmentioning

confidence: 99%

The Role of GDP Growth in the Esg Approach at World Level

Costantiello,

Leogrande

2024

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We analyze the question of GDP Growth-GDPG rate in the context of Environmental, Social and Governance-ESG framework. We use World Bank data for 193 countries in the period 2011-2020 using different econometric techniques i.e., Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled Ordinary Least Squares-OLS. We found that GDPG rate is positively associated, among others, to “Government Effectiveness” and “Prevalence of Undernourishment” and negatively associated among others to “Unemployment” and “Research and Development Expenditure”. Furthermore, we have applied the k-Means algorithm optimized with the Elbow method and we found the presence of four clusters in the sense of GDPG rate. Finally, we confront eight machine learning algorithms to predict the value of GDPG rate and we found that the Polynomial Regression is the best predictor. The Polynomial Regression predicts an increase of GDPG rate equal to 2.88% on average for the analysed countries.

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Corporate sustainability performance, stock returns, and ESG indicators: fresh insights from EU member states

Cited by 21 publications

References 46 publications

Can nonfinancial disclosure (NFD) benefit companies? - Evidence from the 2016 Hong Kong “Comply or Explain” mandatory environmental, social, and governance (ESG) disclosure policy

Can nonfinancial disclosure (NFD) benefit companies? - Evidence from the 2016 Hong Kong “Comply or Explain” mandatory environmental, social, and governance (ESG) disclosure policy

The Role of GDP Growth in the ESG Approach at World Level

The Role of GDP Growth in the Esg Approach at World Level

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