The Impact of Environmental, Social, and Governance Factors on the Performance of Romanian Listed Companies

Cristina Ioana Balint ()
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Cristina Ioana Balint: Babeş-Bolyai University

A chapter in Sustainable and Resilient Businesses in the Global Economy, 2025, pp 287-307 from Springer

Abstract: Abstract The primary objective of this paper is to examine the impact of environmental, social and governance (ESG) factors on the financial performance of Romanian companies listed on the Romanian Stock Exchange. Using content analysis, ESG performance data were collected from annual and sustainability reports of the sampled companies. The study uses multiple linear regression to analyse the relationship between the dependent variables: operational performance (Return on Assets), financial performance (Return on Equity), market performance (Market-to-Book Value) and market value (Price-Earnings Ratio)—and the independent variable, ESG score. Control variables include company size, financial leverage, company age, and foreign institutional investment. The results of the model indicate that the ESG score is not positively associated with the companies’ performance but does have an impact on their market value. Among the control variables, size and leverage have the most influence, with both positive and negative effects. It is important to note that the findings are specific to the context of this study and the limited number of Romanian companies listed on the Bucharest Stock Exchange during the period 2022–2023. Given the short time frame to assess lag effects and the limited availability of ESG scores for companies, this research has limitations.

Keywords: ESG; Company performance; Market value; Romanian companies (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-75883-6_18

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DOI: 10.1007/978-3-031-75883-6_18

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