ESG performance and economic growth: a panel co-integration analysis

Diaye, Marc-Arthur; Ho, Sy-Hoa; Oueghlissi, Rim

doi:10.1007/s10663-021-09508-7

Cited by 44 publications

(31 citation statements)

References 44 publications

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“…Of the three ESG components, only the governance dimension has a positive bearing on financial performance. Similarly, though Diaye et al (2022) report that better ESG performance helps in the long-term economic growth of a country but fail to establish such a significant relationship for the short term. Pirtea et al (2021) in the context of large global public agricultural companies find that the impact of overall ESG score is positive for earnings before interest and tax (EBIT), negative for ROA and insignificant for return on equity (ROE).…”

Section: Theories Relating To Environmental Social and Governance (Es...mentioning

confidence: 99%

Environmental, social and governance (ESG) performance and firm performance in India

Maji

Lohia

2022

SBR

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Purpose This paper aims to investigate the impact of environmental, social and governance (ESG) performance on the firm performance of select Indian companies. Design/methodology/approach The present paper is a cross-section study based on secondary data with a sample of 222 Indian firms. The ESG performance for Indian companies is based on the Credit Rating Information Services of India Limited (CRISIL) ESG score, and the financial data are extracted from the ACE Equity database. Both accounting- and market-based measures of firm performance are used. Ordinary least squares and simultaneous quantile regression models are used for empirical investigation. Findings The study reveals that Indian firms focus much more on governance and social parameters than environmental ones. The results indicate that ESG performance and its components are positively associated with firm performance. The results of quantile regression show that the impact of ESG is different at different locations of the conditional distribution of firm performance and the positive impact is more pronounced at upper quantiles. Originality/value To the best of the authors’ knowledge, this is the first study in India based on the CRISIL ESG score for analyzing the ESG and firm performance relationship. Furthermore, in the Indian context, a modest attempt is made to study the influence of ESG performance at different locations of the distribution of firm performance by using quantile regression.

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Section: Theories Relating To Environmental Social and Governance (Es...mentioning

confidence: 99%

Environmental, social and governance (ESG) performance and firm performance in India

Maji

Lohia

2022

SBR

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“…For corporates, ESG has a profound impact on their financial and market performance (Ahmad et al, 2021; Zhao et al, 2018). At the macroeconomic level, a country's excellent ESG performance has a positive and far‐reaching impact on economic growth and the improvement of people's living standards (Diaye et al, 2021). Like ESG, corporate social responsibility (CSR) with a more established history is also seen as an important factor affecting corporates' market value and financial performance (Lins et al, 2017; Luo & Bhattacharya, 2006).…”

Section: Introductionmentioning

confidence: 99%

Environmental, social and governance, corporate social responsibility, and stock returns: What are the short‐ and long‐Run relationships?

Guo

Long

Wang

et al. 2022

Corp Soc Responsibility Env

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What are the relationships between corporate environmental, social, and governance (ESG), corporate social responsibility (CSR), and stock returns? Existing research has affirmed the impact of ESG or CSR on stock returns, but the discussion on the cointegration relationship among these three variables is still insufficient. Therefore, we use panel data of ESG ratings, CSR scores, and annual stock returns of 684 Chinese‐listed companies from 2011 to 2020 to verify the relationship between the variables through panel CADF and Westerlund tests. Meanwhile, we use PMG estimation to find that, in the long run, CSR significantly promotes the improvement of corporate stock returns, but ESG hurts the stock returns of most corporates. Further research proves that the impact of ESG on stock returns closely relates to corporate profitability. Our findings provide valuable policy implications for both developing and semi‐efficient market countries to help them improve their ESG and CSR performance.

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“…Our review has identified the scarcity of studies that investigate the long-term vs short-term economic implications of green finance and green practices. An example is Diaye, Ho, and Oueghlissi (2021) who examine 29 Organisation for Economic Co-operation and Development countries during the 1996-2014 period and find that while there is a positive relationship between ESG and gross domestic product per capita in the long run, such a relationship does not exist in the short run. It has been a long-lasting concern whether economic and environmental pursuits are compatible (Gray, 2006).…”

Section: The Emerging Areas Of Green Financementioning

confidence: 99%

Green finance, sustainability disclosure and economic implications

Liu

2023

FREP

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PurposeIn this study, the authors provide a systematic literature review of articles in the emerging areas of green finance and discuss the status and challenges in sustainability disclosure, which is crucial for the efficiency of green financial instruments. The authors then review the literature on the economic implications of green finance and outline future research directions.Design/methodology/approachThe authors use the analytical framework – Search, Appraisal, Synthesis, and Analysis (SALSA) to conduct the systematic review of the literature.FindingsIncreasing public attention to the environment motivates the use of green finance to fund environmentally sustainable projects, and the rise of green finance intensifies the demand for environmental disclosure. Literature has documented tremendous growth in sustainability reporting over time and around the globe, as well as raised concerns about how such reporting lack consistency, comparability, and assurance. Despite these challenges, the authors find that in general, the literature agrees that a firm’s green practice is positively associated with its financial performance and negatively related to a firm’s cost of capital. Green finance is also found to bring about enhanced risk management and economic development.Originality/valueThe authors provide one of the first reviews of green finance, sustainability disclosure and the impact of green finance on financial performance, capital market and economic development.

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ESG performance and economic growth: a panel co-integration analysis

Cited by 44 publications

References 44 publications

Environmental, social and governance (ESG) performance and firm performance in India

Environmental, social and governance (ESG) performance and firm performance in India

Environmental, social and governance, corporate social responsibility, and stock returns: What are the short‐ and long‐Run relationships?

Green finance, sustainability disclosure and economic implications

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