Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2113336
A non-linear assessment of ESG and firm performance relationship: evidence from China
Ganlin Pu
Sažetak
The main objective of this paper is to assess the non-linearities
between the ESG activities and firm performance in case of an
emerging market. China is identified as a case study for the present
examination. Even though this research objective has been
explored by past researcher, the evidence presented in literature
is not conclusive. The paper hypothesizes that such conflicting or
inconclusive results can potentially be attributed to wrong modeling,
datasets that include both developing and the developed
markets, and the prevalent endogeneity issue in corporate governance
literature. For the purpose of this paper, the author uses
the dynamic panel approach of First difference and the System
Generalized Method of Moments. The findings from the analysis
of 232 Chinese listed firm show a positive association between
ESG activities and the firm performance. However, the relationship
is nonlinear. In other words, the relationship between ESG activities
and the firm performance is inverted U-shaped. This indicates
the relationship is positive up to a certain threshold and once the
ESG activities cross that threshold it start to have negative effect.
The key insight from this research is that the firm has to find their
threshold of ESG activities to gain maximum benefits from
such activities.
Ključne riječi
ESG; firm performance; emerging economy; China
Hrčak ID:
306450
URI
Datum izdavanja:
31.3.2023.
Posjeta: 1.850 *