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Does ESG certification add firm value?

Woei Chyuan Wong, Jonathan Batten, Abd Halim Ahmad, Shamsul Bahrain Mohamed-Arshad, Sabariah Nordin and Azira Abdul Adzis

Finance Research Letters, 2021, vol. 39, issue C

Abstract: This paper examines the impact of environmental, social and governance (ESG) certification on Malaysian firms. The analysis shows that ESG certification lowers a firm's cost of capital, while Tobin's Q increases significantly. These findings, while consistent with existing studies in developed economies, demonstrate the value enhancement from corporate social responsibility disclosure by firms in emerging and developing nations. Overall, the study confirms the benefits to stakeholders from firms pursuing an ESG agenda.

Keywords: Cost of capital; Corporate social responsibility; Emerging markets; Environmental, social and governance certification; ESG; Malaysia (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319312735

DOI: 10.1016/j.frl.2020.101593

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