The Moderating Role of Technological Innovation on Environment, Social, and Governance (ESG) Performance and Firm Value: Evidence from Developing and Least-Developed Countries

Yusheng Kong, Andrew Agyemang (), Noha Alessa and Maxwell Kongkuah
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Yusheng Kong: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Andrew Agyemang: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Noha Alessa: Department of Accounting, College of Business and Administration, Princess Nourah bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia
Maxwell Kongkuah: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2023, vol. 15, issue 19, 1-16

Abstract: Recently, there has been growing recognition of the significance of environmental, social, and governance (ESG) factors in assessing a company’s performance and worth. Previous research has failed to take into account the significant impact of technological innovation in their empirical investigations. This study fills the gap by investigating the moderating impact of technological innovation on ESG performance and company value in developing and least-developed countries. The study utilized secondary data from 78 pharmaceutical companies from 2009 to 2022. For the investigation, we used the pooled mean group (PMG) and generalized methods of moments (GMM) estimators. The findings reveal that environmental and social performance influence firms’ value; however, governance performance does not influence firms’ value. Additionally, technological innovation acts as a catalyst, strengthening the favorable influence of ESG performance on firm value. The findings affirm the need to incorporate technological innovation, as it enables pharmaceutical firms to implement more efficient and sustainable practices.

Keywords: ESG performance; firm value; technological innovation; pharmaceutical firms (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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