 Do financial constraints lead to environmental, social and governance controversies? The role of country contextKaren Gloria Vargas‐Santander, Susana Álvarez‐Diez, Samuel Baixauli‐Soler and María Belda‐Ruiz Business Strategy and the Environment, 2025, vol. 34, issue 1, 965-981 Abstract: The term sustainability and environmental, social and governance (ESG) criteria has gained greater importance globally in recent decades. As social and environmental issues increase, firms are advocating the need to be more sustainable. However, in this scenario, corporate controversies still persist, and an analysis of their causes is required. This study focuses on establishing the relationship between financial constraints (FC) and ESG controversies and on determining whether the country context might modify the controversial behaviours of financially constrained firms. Through a Tobit analysis for panel data—and using a sample of firms with headquarters in 47 countries—our results show a positive and significant influence of FC on ESG controversies. In addition, our evidence confirms that country context impacts relationships within the firm, and that opting for controversial activities is increasingly less viable for firms located in countries where there is institutionalized sustainability. Date: 2025 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:34:y:2025:i:1:p:965-981 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
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