The Impact of Environmental, Social, and Governance Factors on Corporate Financial Performance in Emerging Markets

Fuzuli Aliyev and Nijat Alishov

Journal of Sustainable Development Issues (JOSDI), 2023, vol. 1, issue 1, 42-62

Abstract: This paper examines the relationship between environmental, social, and governance (ESG) activities and the financial performance of corporations in emerging markets. It utilizes Return on Assets (ROA) and Return on Equity (ROE) to gauge profitability, and Tobin's Q to evaluate the effect of ESG factors on stock market performance. Firm size, total asset turnover ratio, and leverage have also been considered as control variables. The sample consists of 556 companies operating in emerging markets, and data from 2012 to 2021 has been analyzed. The study finds an inverse relationship between environmental performance and ROA, however, any of the other ESG activities do not significantly affect the financial performance of companies. Therefore, the study concludes that there are no notable positive effects of ESG performance on CFP in emerging markets.

Keywords: ESG; Return on Assets; Tobin's Q; Return on Equity (search for similar items in EconPapers)
JEL-codes: G30 G31 G39 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journalsdi.com/index.php/jsdi/article/view/15/7 (application/pdf)
https://journalsdi.com/index.php/jsdi/article/view/15 (text/html)

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:arv:journl:v:1:y:2023:i:1:p:42-62

DOI: 10.62433/josdi.v1i1.15

Access Statistics for this article

Journal of Sustainable Development Issues (JOSDI) is currently edited by Shahriyar Mukhtarov

More articles in Journal of Sustainable Development Issues (JOSDI) from SDIjournals
Bibliographic data for series maintained by Shahriyar Mukhtarov ().