Abstract
This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social, and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets, and market value. We found that most of the ESG activities reveal a nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.
| Original language | English |
|---|---|
| Pages (from-to) | 286-300 |
| Number of pages | 15 |
| Journal | Business Strategy and the Environment |
| Volume | 28 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Feb 1 2019 |
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All Science Journal Classification (ASJC) codes
- Business and International Management
- Geography, Planning and Development
- Strategy and Management
- Management, Monitoring, Policy and Law
Cite this
Do environmental, social, and governance activities improve corporate financial performance? / Xie, Jun; Nozawa, Wataru; Yagi, Michiyuki; Fujii, Hidemichi; Managi, Shunsuke.
In: Business Strategy and the Environment, Vol. 28, No. 2, 01.02.2019, p. 286-300.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Do environmental, social, and governance activities improve corporate financial performance?
AU - Xie, Jun
AU - Nozawa, Wataru
AU - Yagi, Michiyuki
AU - Fujii, Hidemichi
AU - Managi, Shunsuke
PY - 2019/2/1
Y1 - 2019/2/1
N2 - This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social, and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets, and market value. We found that most of the ESG activities reveal a nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.
AB - This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social, and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets, and market value. We found that most of the ESG activities reveal a nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.
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UR - http://www.scopus.com/inward/citedby.url?scp=85052663280&partnerID=8YFLogxK
U2 - 10.1002/bse.2224
DO - 10.1002/bse.2224
M3 - Article
VL - 28
SP - 286
EP - 300
JO - Business Strategy and the Environment
JF - Business Strategy and the Environment
SN - 0964-4733
IS - 2
ER -