Does environmental, social, and governance performance elevate firm value? International evidence

Adrian Gawęda

Finance Research Letters, 2025, vol. 73, issue C

Abstract: The impact of a company's environmental, social, and governance performance (ESGP) on firm value is a widely discussed question; however, findings are not conclusive. Using panel analysis on 5,540 listed companies from 43 countries between 2018 and 2022, we explore the impact of composite ESGP and its pillars on firm value. We investigate how country level of economic and sustainability development moderates this relationship. Our findings reveal (i) negative association between ESGP and firm value, and (ii) it is more pronounced in more developed countries. We contribute by incorporating country development into the debate on ESGP and firm value relationship.

Keywords: ESG performance; Firm value; Country development; Economic development; Sustainability; Tobin's Q (search for similar items in EconPapers)
JEL-codes: G15 G32 M14 M49 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016684

DOI: 10.1016/j.frl.2024.106639

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