Investigation of ESG spillovers for external stakeholders in Russian regions

Waves of recent global economic crises at the beginning of the 2000s gave a rise to an increased attention to external effects, or spillovers, of environmental, social and corporate governance (ESG) practices of companies. The paper aims to study the impact of ESG practices on regional economic and social development from the viewpoint of external stakeholders, considering the ability of local companies to retain key human capital. The theoretical framework of the research is corporate governance theory and the ESG concept. Correlation, factor, regression and path analyses are used in combination to determine the impact of individual ESG practices on regional development and place attachment. The empirical evidence comes from the 2023 survey of 359 respondents from two industrialized regions of Russia. The originality of the study is based on (1) a structured questionnaire developed by the authors to examine external stakeholders’ opinions on ESG problems in the regions, and (2) the sociological concept of place attachment viewed as the most important indicator of human capital retention. Our findings show that practices of social responsibility and labour market growth primarily influence the perception of regional economic development. In turn, there is no significant relationship between ESG practices and people’s attachment to the region of residence. Practical conclusions show that external stakeholders are mainly concerned about ESG labour market spillovers: creation of stable jobs, provision of career prospects and technological advantages in the region.