The dark side of economic success: ESG crime rate of European countries is driven by the conditions for doing business

Gabriela Chmelikova (), Renata Kučerová, Helena Chládková and Jindrich Spicka ()
Additional contact information
Gabriela Chmelikova: Department of Regional and Business Economics, Faculty of Regional Development and International Studies, Mendel University in Brno, Czech Republic
Jindrich Spicka: Department of Statistics, Faculty of Economics and Management, Czech University of Life Sciences, Prague, Czech Republic

No 2024-97, MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics

Abstract: This paper investigates the role of the institutional business environment with favourable conditions for conducting business in the process of the EU transition towards sustainability. We draw on the theory of institutional economics and empirically investigate our overarching research question as to which extent the conditions conducive to do business are linked to increased levels of irresponsible corporate behaviour in the EU.. Pursuing an econometric approach, we test a set of hypotheses using various measures of favourable conditions for conducting business as drivers for corporate social irresponsibility. We build a unique dataset that includes observations of irresponsible corporate behaviour in 16 EU countries over the period 2015 – 2020. Our findings show that institutions conducive to support the ease of doing business lead to an increased ESG (Environmental, Social, and Governance) crime rate measured by the share of firms acting irresponsibly and that the intensity of past ESG incidents is associated with a lower current occurrence of offences against sustainability. Our conclusion could help drive progress toward sustainability by the recommendation to orient policies more toward countries with attractive business environments, as they tend to harbour a concentration of the most harmful firms. Further, it is recommended to harmonise corporate tax rates and other business conditions across EU member states.

Keywords: Corporate Social Irresponsibility; Institutional Economics; Attractive Business Environments; Sustainability; ESG (search for similar items in EconPapers)
JEL-codes: K42 L51 M14 O17 Q56 (search for similar items in EconPapers)
Pages: 42
Date: 2024-11
New Economics Papers: this item is included in nep-eec, nep-env, nep-law and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://ftp.mendelu.cz/RePEc/men/wpaper/97_2024.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:men:wpaper:97_2024

Access Statistics for this paper

More papers in MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics Contact information at EDIRC.
Bibliographic data for series maintained by Luděk Kouba ().