Does ESG performance indicate corporate economic sustainability? : evidence based on the sustainable growth rate
Zihao Lin
Based on a sample of Chinese listed companies from 2009 to 2021, this study finds that environmental, social, and governance (ESG) performance has a positive impact on having a sustainable growth rate (SGR). Our heterogeneity analysis reveals that ESG performance leads to higher SGR, particularly among firms with lower SGR or non-state-owned enterprises. The mechanism analysis suggests that ESG performance enhances SGR by stimulating patent applications, reducing agency costs, and mitigating corporate risk. Further analysis indicates that the environmental score has a negative influence on SGR, whereas social and governance scores have a positive impact. Ultimately, this research emphasizes that ESG performance can enhance financial performance by driving SGR
Year of publication: |
2024
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Published in: |
Borsa Istanbul Review. - Amsterdam [u.a.] : Elsevier, ISSN 2214-8450, ZDB-ID 2745445-9. - Vol. 24.2024, 3, p. 485-493
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Subject: | Agency costs | Corporate innovation | Economic sustainability | ESG performance | Firm risk | Sustainable growth rate | Nachhaltige Entwicklung | Sustainable development | Corporate Social Responsibility | Corporate social responsibility | Unternehmenserfolg | Firm performance | Wirtschaftswachstum | Economic growth | Nachhaltigkeit | Sustainability |
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