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Environmental, social and governance initiatives and wealth creation for firms: An empirical examination

Bhaskaran, Rajesh Kumar and Irene, Wei Kiong Ting and Sukumaran, Sujit K. and Sumod, Saraswathy Divakaran (2020) Environmental, social and governance initiatives and wealth creation for firms: An empirical examination. Managerial and Decision Economics, 41 (5). pp. 710-729. ISSN 0143-6570

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Abstract

This study examines the effect of environmental, social, and governance (ESG) activities on firm performance of 4,887 global companies. Mean difference test shows that firms with a high level of ESG activities are different from their low‐ESG counterparts. The two‐stage least square results suggest that ESG activities on (a) the welfare for internal stakeholders and best corporate governance practices are beneficial for firm performance and (b) antitakeover mechanisms (pollution control) adopted by firms are negatively (positively) valued by market players. Overall, this is the first study to examine the effects of ESG on the market‐based and accounting‐based performance of global firms.

Item Type: Article
Additional Information: Indexed by Scopus
Uncontrolled Keywords: ESG activities; Environmental initiatives; Social initiatives; Governance initiatives
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Faculty/Division: Faculty of Industrial Management
Depositing User: Mrs Norsaini Abdul Samat
Date Deposited: 19 Jan 2021 06:57
Last Modified: 19 Jan 2021 06:57
URI: http://umpir.ump.edu.my/id/eprint/28113
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