ESG activities and firm cash flow

Gregory, Richard Paul

doi:10.1016/j.gfj.2021.100698

Cited by 29 publications

(17 citation statements)

References 15 publications

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“…Instead, a U‐shaped quadratic relationship was observed (Table 4 and Figure 2a). This result is somewhat inconsistent with several previous studies that observed a positive linear relationship for MC as a performance variable (Gregory, 2022; Șerban et al, 2022). However, this result is in line with the study by Kim and Oh (2019), which found evidence of a U‐shaped relationship between CSR and Tobin's Q among firms in India.…”

Section: Discussioncontrasting

confidence: 99%

Environmental, social, and governance activities and firm performance: Global evidence and the moderating effect of market competition

Jung

Yoo

2023

Corp Soc Responsibility Env

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Despite the growing demand for corporate environmental, social, and governance (ESG) engagement in response to the global complex crisis, the impacts of ESG activities and market environment on firm performance have not been sufficiently investigated. This study aims to explore how ESG activities affect firm performance and how the competitive market environment moderates this relationship. The panel data regression analysis was performed to investigate the relationship between the ESG performance and firm performance (specifically, market capitalization as a measure of market‐based firm performance and profit margin and return on assets as measures of account‐based firm performance) with the data of 2115 listed companies from 53 countries over the past 5 years (2017–2021). The analysis results showed a U‐shaped relation between ESG performance and market capitalization, and a positive linear relationship was observed between ESG performance and profit margin or return on assets. Importantly, it was found that these relationships are negatively moderated by the competition (number of competitors) in the market. It can be interpreted that the greater the number of competitors in the market, the weaker the effect of ESG performance on firm performance. This study discusses plausible reasons for these observations and managerial and policy implications drawn from the results. This study not only analyzes the relationship between ESG performance and various aspects of firm performance at the global level, but also accumulates new evidence for the moderating effect of market competition.

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Section: Discussioncontrasting

confidence: 99%

Environmental, social, and governance activities and firm performance: Global evidence and the moderating effect of market competition

Jung

Yoo

2023

Corp Soc Responsibility Env

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“…3.5 Environmental, social and governance and cash flow ESG firms may have a lower cost of capital, hence less riskiness or higher cash flows. While ESG efforts help the company, most cash flow advantages go to the creditors of developed market companies (Gregory, 2022). These advantages are primarily derived from enterprises' increased expenditure on initiatives that demonstrate how they incorporate economic (financial), social and environmental factors into their day-to-day judgment processes.…”

Section: Environmental Social and Governance And Cost Of Capitalmentioning

confidence: 99%

“…In contrast, the stakeholder theory claims that CSR performance advantages capital markets by reducing information asymmetry among parties to the contract and reducing issuers' perceived legal risks. The impact of ESG initiatives on capital costs has recently gotten much attention (Gregory, 2022; Michaels and Grüning, 2017). From a managerial perspective, CSR disclosure's economic ramifications are crucial, as it is subject to management discretion and provides a tool for reaping economic advantages (Lee et al , 2009).…”

Section: Literature Reviewmentioning

confidence: 99%

ESG and financial variables: a systematic review

Saini,

Aggarwal,

Dhingra

et al. 2023

IJLMA

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Purpose The growing trend in environmental, social and governance (ESG) research, along with its relevance to the financial performance of firms, has gained a lot of attraction in academia and industry. This study aims to fill the existing gap in the literature by conducting a thorough systematic review with the latest research articles in this area. Design/methodology/approach This study adopted a blend of systematic literature review and bibliometric techniques. A proper search string was used to retrieve the data from the Scopus database. The final dataset comprises 296 documents used for science mapping, and the review was done of 60 articles finalised after further refining the documents. Findings The results of this study indicate that stakeholder, legitimacy and signalling theories are the foundation for ESG and financial performance. Social firms have a lower capital cost because of their low-risk potential. Moreover, this study provides the knowledge structure by framing four clusters, “CSR/ESG determinants and firm performance”, “Moderators and Mediators”, “Investors’ perception” and “CSR in the tourism sector”. Originality/value This study has reviewed the literature with both tools, that is, qualitative (systematic review) and quantitative (bibliometric). Moreover, this study presents the latest synthesis of the literature.

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“…Companies disclose different issues, different portions (volumes) of financial information; some companies disclose monetary values of its ESG activities, some companies describe the events, which occurred concerning ESG-factors in the reporting period, other companies just disclose the general policy of the company speaking about ESG activities. These differences create some additional difficulties for investors, who are interested in getting full image of ESG profile of the company because of the lack of unified approach towards ESG assessment and reporting (Dorfleitner et al, 2015;Gregory, 2022).…”

Section: Literature Review Of Revevant Sourcesmentioning

confidence: 99%

Enhancing Investment Attractiveness through ESG Ratings: A Sustainable Development Perspective in the Banking, Electric Utilities and IPP Industries

Kachalov

Finogenova

2023

SDJ

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Objective: Main goal of the research is toto assess the level of influence of the ESG rating on the investment attractiveness of companies. The object of the study is the companies for which the ESG rating is calculated (the oil and gas, metallurgical, electric power and banking industries are observed). The hypothesis is that the management dealing with issues related to ESG should take into account the significance of the impact of the ESG rating on the investment attractiveness of companies, if the significance is proven. Method: The methodological part of this research is formed by an econometric estimation of regressions based on panel data models. Results: There were performed econometric assessment of the impact of the ESG rating on the investment attractiveness of companies. The results of econometric modeling are presented in the list of recommendations for ESG managers. In addition, results of the research proves the significance of COVID-19 pandemic impact on the investment attractiveness of the oil and gas companies. Conclusion: The novelty of the results is in the individual econometric estimation of companies’ ESG-rating impact on the investment attractiveness based on the unique set of companies, which present four different industries. Based on the sample of companies from eleven countries, for which ESG scores for the period from 2016 to 2020 were calculated, the statistical significance of ESG-factors, concerning the analysis of its impact on the indicators of investment attractiveness (ROI, EPS), was identified.

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ESG activities and firm cash flow

Cited by 29 publications

References 15 publications

Environmental, social, and governance activities and firm performance: Global evidence and the moderating effect of market competition

Environmental, social, and governance activities and firm performance: Global evidence and the moderating effect of market competition

ESG and financial variables: a systematic review

Enhancing Investment Attractiveness through ESG Ratings: A Sustainable Development Perspective in the Banking, Electric Utilities and IPP Industries

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