Competition and ESG practices in emerging markets: Evidence from a difference-in-differences model

Henrique Castro Martins

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: This paper investigates how competition affects firms' environmental, social, and governance (ESG) practices in 22 emerging markets, using a sample of 6,906 firm–year observations from 2011 to 2019. Using a difference-in-differences technique and matched samples with a treated and a control group, I explore exogenous variation in the competitive environment of one country, Brazil, to assess the competition´s causal effect on ESG. The results suggest that firms adjust ESG practices negatively after a shock in competition, contrasting with previous results from developed economies.

Keywords: ESG; Product market competition; Difference-in-differences; Emerging markets (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003731

DOI: 10.1016/j.frl.2021.102371

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