Do the firm characteristics moderate the nexus between the firm's sustainable practices and financial performance?

IF 4.8 Q1 BUSINESS Business Strategy and Development Pub Date : 2024-04-29 DOI:10.1002/bsd2.376
Umakanta Gartia, Ajaya Kumar Panda
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Abstract

The paper explores the partial and integrated influence of corporate sustainability practices on the financial execution of Indian-listed firms. The study considered a sample of 569 listed firms, and the study period spans from 2010 to 2022. Using estimates of feasible generalized least square and quintile regression, the study finds a positive association between the environmental, social, and governance (ESG) score and the financial performance of firms. All the individual dimensions of the ESG score positively affect the firm's internal and external values. Environmental practices have the highest impact on improving balance sheet values through return on asset (ROA). In contrast, social practices have the highest impact on creating market value through Tobin's Q (TQ) compared with other dimensions. However, for large firms, excess investment in ESG may not support their balance sheet through ROA but generates market value through TQ. ESG disclosers negatively impact the internal earnings of firms that are financially inflexible but, in the aggregate, support the firm's market value. In addition, the study finds a significant moderating effect of size, earnings, value, and financial flexibility on the association between ESG scores and the financial performance of the firms.

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企业特征是否会缓和企业可持续实践与财务业绩之间的关系?
本文探讨了企业可持续发展实践对印度上市公司财务执行的部分和综合影响。研究以 569 家上市公司为样本,研究时间跨度为 2010 年至 2022 年。通过使用可行的广义最小二乘法和五分位回归估计,研究发现环境、社会和治理(ESG)得分与企业财务绩效之间存在正相关。环境、社会和治理得分的所有单个维度都会对企业的内部和外部价值产生积极影响。环境实践对通过资产回报率(ROA)提高资产负债表价值的影响最大。相比之下,与其他维度相比,社会实践对通过托宾 Q 值(TQ)创造市场价值的影响最大。然而,对于大型企业来说,在环境、社会和治理方面的过量投资可能无法通过资产回报率支持其资产负债表,但却能通过托宾 Q 值创造市场价值。披露环境、社会和公司治理信息的公司会对财务不灵活的公司的内部收益产生负面影响,但总体上会支持公司的市场价值。此外,研究还发现,企业规模、盈利、价值和财务灵活性对 ESG 分数与企业财务绩效之间的关联具有显著的调节作用。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Business Strategy and Development
Business Strategy and Development Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)
CiteScore
5.80
自引率
6.70%
发文量
33
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