The impact of economic policy uncertainty on sustainability (ESG) performance: the role of the firm life cycle
Muhammad Azeem Qureshi,
Tanveer Ahsan,
Ammar Gull () and
Zaghum Umar
Additional contact information
Tanveer Ahsan: FMCO - Financial Markets & Corporate Outcomes - Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business
Post-Print from HAL
Abstract:
Purpose This study investigates the impact of economic policy uncertainty (EPU) on corporate sustainability [environmental, social and governance (ESG)] performance and aims to explore whether uncertainty-induced sustainability performance is influenced by the firm's life cycle (LC). Design/methodology/approach The study uses data from European non-financial firms listed during the period from 2002 to 2022 to extend the nascent literature regarding EPU and sustainability performance while applying a dynamic panel data regression analysis (Generalized Method of Moments - GMM System) on 11,462 firm-year observations of 1,869 European firms. Findings The authors find overwhelming evidence that policy uncertainty affects the sustainability performance of European firms. The firms restrict their environmental and governance-related activities and address immediate issues to survive during periods of high EPU. Conversely, the firms increase their social engagements to decrease uncertainty-induced information asymmetry. The authors' results show that the intensity and type of sustainability performance are also influenced by the firm's LC. The results imply that board gender diversity (BGD) increases while power concentration with the chief executive officer (CEO) decreases sustainability performance. Practical implications These findings have important implications for policymakers, potential investors, firm management and other stakeholders given the firms' access to resources and preferences to encounter uncertainty vary across different LC stages. Originality/value To the best of the authors' knowledge, this is the first study that investigates the role of the firm's LC in the relationship between policy uncertainty and sustainability performance in the European context.
Date: 2023-11-27
References: Add references at CitEc
Citations:
Published in International Journal of Managerial Finance, 2023, 20 (4), pp.872-891. ⟨10.1108/IJMF-04-2022-0158⟩
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Journal Article: The impact of economic policy uncertainty on sustainability (ESG) performance: the role of the firm life cycle (2023) 
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:hal:journl:hal-04675684
DOI: 10.1108/IJMF-04-2022-0158
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().