World ESG performance and economic activity

Timotheos Angelidis, Athanasios Michairinas and Athanasios Sakkas

Journal of International Financial Markets, Institutions and Money, 2024, vol. 93, issue C

Abstract: Using data from forty-six developed and emerging markets, we show that a world-based environmental, social, and governance index (ESGI) provides useful information about future economic activity in- and out-of-sample. A relatively high increase in ESGI predicts a decrease (increase) in future economic activity in the short (long) term. We document that the environmental, social, and governance components of ESGI contribute to the predictability of economic activity. Our results have significant implications for policymakers to advise firms to adopt better ESG practices.

Keywords: Forecasting; Economic Activity; ESG; Environmental; Social; Governance (search for similar items in EconPapers)
JEL-codes: E37 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:93:y:2024:i:c:s1042443124000623

DOI: 10.1016/j.intfin.2024.101996

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