The Nonlinear Relation between Institutional Ownership and Environmental, Social and Governance Performance in Emerging Countries

Jennifer Martínez-Ferrero and María-Belén Lozano
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Jennifer Martínez-Ferrero: Departamento Administración y Economía de la Empresa, Facultad de Economía y Empresa, Instituto Multidisciplinar de Empresa, Universidad de Salamanca, 37007 Salamanca, Spain
María-Belén Lozano: Departamento Administración y Economía de la Empresa, Facultad de Economía y Empresa, Instituto Multidisciplinar de Empresa, Universidad de Salamanca, 37007 Salamanca, Spain

Sustainability, 2021, vol. 13, issue 3, 1-16

Abstract: This paper examines how the level of institutional ownership affects environmental, social, and governance (ESG) performance in emerging countries by jointly investigating a nonlinear relationship. By examining an international sample composed of 17,318 firm–year observations from the period 2012–18 for 16 emerging countries, our findings reveal that the ESG performance of firms located in emerging countries depends on the level of influential institutional ownership, and displays a U-shaped relation, particularly for environmental disclosure. Institutional investors with low ownership are less likely to promote higher ESG performance in emerging countries, although this effect is attenuated when institutional ownership reaches a significant percentage, constituting a critical mass.

Keywords: ESG performance; institutional ownership; emerging countries (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:3:p:1586-:d:492031

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