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Assessing the effect of core and expanded ESG on corporate financial performance: COVID-19’s moderating role

Santi Gopal Maji & Prachi Lohia

Journal of Indian Business Research2024https://doi.org/10.1108/jibr-07-2023-0233article
AJG 1ABDC C
Weight
0.71

What the paper says

Purpose This study aims to investigate the influence of disclosing environmental, social and governance (ESG) factors on financial performance, taking into account the moderating effect of the COVID-19 pandemic. Design/methodology/approach A sample of the top 100 non-financial firms listed on the Bombay Stock Exchange, for the years 2019–2022, has been considered. Suitable panel regression models have been used to assess the impact of non-financial disclosure on accounting and market measures of firm performance. In addition, a panel data moderating effect model is used to assess the moderating impact. Findings The outcomes of the study partially favour the value-creation role of ESG disclosure. Specifically, the disclosure of already established ESG metrics, particularly social and governance aspects, positively impacts the market performance while environmental transparency negatively impacts the accounting performance. Of the three ESG components, only extended governance disclosure adds to market value. Results of the moderation effect reveal a significant impact of the pandemic on the ESG disclosure–financial performance relation. However, a more pronounced effect before the pandemic is observed. The results are robust to endogeneity. Originality/value This study sheds light on the financial consequences of ESG disclosure within the context of an emerging nation. This is done by using a novel holistic ESG reporting framework to obtain more accurate results. Furthermore, the study distinguishes itself by examining the long-term moderating influence of the unexpected COVID-19 crisis on the ESG disclosure–financial performance relation.

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https://doi.org/https://doi.org/10.1108/jibr-07-2023-0233

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@article{santi2024,
  title        = {{Assessing the effect of core and expanded ESG on corporate financial performance: COVID-19’s moderating role}},
  author       = {Santi Gopal Maji & Prachi Lohia},
  journal      = {Journal of Indian Business Research},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1108/jibr-07-2023-0233},
}

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Evidence weight

0.71

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.89 × 0.4 = 0.36
M · momentum0.82 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.