The Role of Environmental, Social, and Governance Performance on Attracting Foreign Ownership: Evidence from Saudi Arabia

Alregab, Hend

doi:10.3390/su142315626

Cited by 2 publications

(1 citation statement)

References 70 publications

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“…The stakeholder theory suggests that firms should function in a responsible manner, and as such ESG performance comes under the gambit of the same and takes into account the long-term well-being of the firm (Bavoso, 2013). Firm engagement in activities that are focussed on broader parameters such as ESG can create long-term value from the point of view of legitimacy theory and social contracts theory (Alregab, 2022; Ho et al , 2022; Lee and Raschke, 2023; Musviyanti et al , 2022; Reber et al , 2022).…”

Section: Review Of Literature and Hypothesis Developmentmentioning

confidence: 99%

Shrinking the capital costs and beta risk impediments through ESG: study of an emerging market

Gupta,

Aggarwal

2023

ARA

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PurposeThis study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of capital (COC) and systematic risk, especially for emerging markets such as India.Design/methodology/approachA sample of 114 Indian firms from eight prominent industries based on Thomson Reuters classification (TRBC) are used in the study. A panel regression with industry-fixed effects is carried out to account for industry heterogeneity. For robustness, the authors also carry out a matched sample analysis.FindingsThe authors observe a negative and significant relationship between ESG performance with COC and systematic risk, respectively. For the pillar-wise analysis, the authors observe that only governance performance is negatively and significantly related to COC whereas the environmental and social performances are negative and insignificant. For ESG pillar level analysis for beta, the authors observe that all pillars are negative and significant, thus making a case for how firms can fine-tune their ESG strategies according to each pillar.Research limitations/implicationsAs the ESG concept is still in a very nascent stage, data availability is a definite challenge in India.Practical implicationsAs ESG is increasingly becoming relevant for multiple stakeholders, this study aims to provide evidence that can potentially guide the regulators, practitioners, and academicians to address the contemporary needs of these stakeholders, while also doing good for the firm in the traditional sense.Social implicationsThe transition to a sustainable economy is a challenge for emerging economies, especially for a country like India where stakeholders are not only varied but also huge in number. With this study's contribution towards an incremental understanding of ESG, Indian regulators and policymakers can bring forward mandates as to ESG compliances that are rewarding for the firms and give them enough impetus towards complying with ESG norms.Originality/valueThe extant literature on ESG majorly discusses the relationship between ESG performance and financial performance. This study addresses the lacuna of the relationship of ESG with COC and beta in the Indian context.

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Section: Review Of Literature and Hypothesis Developmentmentioning

confidence: 99%

Shrinking the capital costs and beta risk impediments through ESG: study of an emerging market

Gupta,

Aggarwal

2023

ARA

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CSR and ownership structure: Moderating role of board characteristics in an emerging country context

Kaimal,

Uzma

2024

Corp Soc Responsibility Env

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The existing literature on the impact of ownership structure on corporate social responsibility (CSR) showed inconsistent results and disregarded the possibility of non‐linear patterns in the relationship. The present study examines the non‐linear relationship between ownership structure (family, foreign, institutional, and government) and CSR expenditure of listed non‐financial service sector firms in India. Further, the moderating effect of board variables, including board size, board independence, multiple directorships and gender diversity, is explored in the ownership structure‐CSR nexus. Based on a balanced panel dataset of 243 non‐financial service sector companies listed in India, the study observed an inverse U‐relationship between institutional ownership and CSR. The study also found that family, foreign, and government ownership positively influence the firm's social engagement. However, the study could find partial support for the moderating role of the four board characteristics; board size, board independence, multiple directorships and gender diversity in ownership‐CSR association. The study contributes to existing CSR and corporate governance literature by exploring one of the major factors (ownership structure) impacting CSR and the role of board variables in the association.

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The Role of Environmental, Social, and Governance Performance on Attracting Foreign Ownership: Evidence from Saudi Arabia

Cited by 2 publications

References 70 publications

Shrinking the capital costs and beta risk impediments through ESG: study of an emerging market

Shrinking the capital costs and beta risk impediments through ESG: study of an emerging market

CSR and ownership structure: Moderating role of board characteristics in an emerging country context

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