What is it about?
The paper aims to investigate the impact of ESG practice on firms’ financial performance in the context of U.S. market from 2018 to 2020.
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Why is it important?
The paper shows that having a better practice of ESG could enhance firms’ financial performance. These findings are consistent with the stakeholder-focused theory instead of shareholder-focus perspective.
Perspectives
The paper examines a sample of 57 U.S. non-financial firms belonging to the S&P 500It reveals that the ESG benefits could make the firms appear more attractive to investors, creating higher market values of the firms’ assets and then higher TobinQ ratio. Not as the TobinQ enhancement, the significant improvement in ROA and ROE would be realized in the long run rather than short term. The low managerial ownership in the U.S. market may increase the chance of ESG over investment by the firms’ managers, hence reducing firm value
Dr. Thinh Gia Hoang
Western Sydney University
Read the Original
This page is a summary of: Help or Hurt? The Impact of ESG on Firm Performance in S&P 500 Non-Financial Firms, Australasian Accounting Business and Finance Journal, January 2022, University of Wollongong Library,
DOI: 10.14453/aabfj.v16i2.7.
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