Does ESG have an impact on stock performance? A panel study of Indian companies

Sachin Singh and Bhanu Pratap Singh

MPRA Paper from University Library of Munich, Germany

Abstract: The present study investigates the impact of environmental, social, and governance (ESG) on firms' profitability in the Indian setting on a sample of 23 firms from 2015 to 2020. The bootstrap corrected fixed effects estimation and inference in the dynamic panel method is employed to investigate the relationship. The dynamic panel results show that the relationship between ESG score and firms' profitability is inconclusive in the short run. However, governance conditions affect firms' investment decisions and the nexus between ESG and firm financial performance in the long run. Therefore, institutional reforms are warranted to stabilize property rights and check parent-client politics for the long-run effects of sustainable environmental governance on firms' profitability.

Keywords: ESG scores; Indian firms; firms' profitability; dynamic panel (search for similar items in EconPapers)
JEL-codes: O10 O30 O33 O38 (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-cfn, nep-cse, nep-eff, nep-env and nep-fmk
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