Are ESG Shares a Safe Haven during COVID-19? Evidence from the Arab Region

Mousa, Musaab; Saleem, Adil; Sági, Judit

doi:10.3390/su14010208

Cited by 30 publications

(28 citation statements)

References 48 publications

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“…Following prior research, we also used the sub-dimensions of ESG performance (i.e., El Khoury et al 2021 ; Engelhardt et al 2021 ), namely, environmental score, social score, and governance score. To measure the effect of the independent variable (COVID-19), we adopted the annual number of cases for each country as a primary measure (e.g., Mousa et al 2022 ; Hoang et al 2022 ), and then, we applied the natural logarithm to it. The scale of COVID-19 cases was used because the international health trend of increasing or decreasing the number of cases is accompanied by closures or openness, which affects business organizations’ performance.…”

Section: Methodsmentioning

confidence: 99%

“…The continuing impact of the pandemic will lead to a negative effect on stock returns (Hoang et al 2022 ). At the same time, the impact of the pandemic is likely to be less harmful to companies with high ESG performance (Mousa et al 2022 ). Also, the strength of the company’s financial performance enhances ESG performance (Sharma et al 2020 ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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ESG performance in the time of COVID-19 pandemic: cross-country evidence

Amosh

Khatib

2023

Environ Sci Pollut Res

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The purpose of this paper is to compare the performance of environmental, social, and governance (ESG) in developing and developed countries prior to and during the COVID-19 pandemic; the study also seeks to reveal the impact of the COVID-19 on the performance of ESG during the pandemic period. Based on a large international panel dataset of 12,325 company-year observations covering 2016–2021, panel regression analysis examined the study hypotheses and achieved the study objectives. The findings indicate that companies have taken precautions against the threats of the COVID-19 pandemic by ensuring compliance with ESG performance to prove their ethical behavior during a crisis. Our findings call into question the notion that companies in developed countries outperform companies in developing countries in terms of ESG performance. As a result, companies in emerging markets outperform companies in developed markets regarding environmental performance, while developed markets focus on social performance. Besides, the ESG performance is positively and significantly affected by the COVID-19, which indicates that during crises, it is important for companies to comply with ethical behavior and the most acceptable in societies. Also, the pandemic has a positive impact on both environmental and social performance, while it has a negative impact on governance performance alone. A considerable body of the literature has addressed the effect of the COVID-19 pandemic on various aspects of a company’s financial and non-financial practices. However, limited effort was given to ESG performance. The current study fills this gap by evaluating the direct effect of the COVID-19 crisis on the ESG performance in developing and developed countries. It also provides insight into the ESG performance and corporate behavior and obligations.

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Section: Methodsmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

ESG performance in the time of COVID-19 pandemic: cross-country evidence

Amosh

Khatib

2023

Environ Sci Pollut Res

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“…The relationship between the sustainable index of Australia and 14 other markets has been investigated using the dynamic conditional correlation (DCC) method (Tularam et al, 2010) and found a significant rise in correlation among the indices during the market crises. However, Mousa et al, 2022 found that the ESG index is less volatile and safer during the crisis period. Maraqa and Bein (2020) found the existence of spillover relationship among the sustainable stock index, stock index of European countries and crude oil prices using DCC multivariate generalized autoregressive conditional heteroskedasticity (MGARCH).…”

Section: Literature Reviewmentioning

confidence: 97%

Integration and Volatility Spillover Among Environmental, Social and Governance Indices: Evidence from BRICS Countries

Sahoo

Kumar

2022

Global Business Review

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The current research examines the integration of environmental, social and governance (ESG) equity indices among emerging markets, that is, Brazil, Russia, India, China and South Africa (BRICS). Daily data of the ESG equity index from 1 January 2012 to 31 December 2021 are collected from Morgan Stanley Capital International (MSCI). The article employs Johansen’s co-integration test for long-term co-movement and Granger causality tests for causality among ESG equity indices. The study also used the BEKK model to investigate the volatility spillover among the ESG indices. Further, the study also calculated hedge ratios and portfolio weights. The results indicate that none of the ESG indices is co-integrated and short-run bi-directional causality exists across the four ESG indices. All the indices are significantly affected by their past shock and volatility. However, India’s ESG index is influenced by the past shock of South Africa and the past volatility of China. The findings suggest that the flow of information between the ESG indices of emerging countries is not developed yet to the point where they may be integrated into the BRICS countries. As a result, these sustainable equity indices must be promoted even more to become fully integrated.

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“…The impacts of the COVID-19 pandemic on Arab capital markets were examined by analyzing both the normal index and the ESG (environment, society, and governance) index. It was found that COVID-19 caused a shock in both indexes (Mousa et al, 2022). For instance, some business enterprises applied digital tools and automation technologies in their operation to maintain usual business processes.…”

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

The role of SMEs’ resilience capabilities in response to COVID-19 era: Evidence from Kazakhstan and Mongolia

Altnaa¹,

Neszmélyi²

2023

Prosperitas

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In many low and middle-income countries, small and medium-sized enterprises (SMEs) play an important role in providing employment, increasing the level of gross domestic product and export share, and in alleviating poverty and inequality. Therefore, governments and international donor organizations take action to diversify and provide access to sustainable financial means for SMEs and support them in many ways. The sudden outbreak of COVID-19 has impacted all-sized enterprises including micro, SMEs, large enterprises, and MNEs negatively, especially in the least developed and developing countries. This is because micro-sized and SMEs were more vulnerable to the pandemic due to their limited financial resources and low resilience capability. Resilience capabilities and innovative characteristics are crucial for SMEs to survive and to respond quickly to sudden phenomena unpredictable in advance. Big enterprises with financial and other resilience capabilities typically address and solve any issue in a timely manner. Even if the theoretical framework of the enterprises’ resilience is well-grounded and studied extensively, most literature in the field mainly focuses on large entities, and only few have explored SMEs. Thus, this study can significantly contribute to practical and theoretical knowledge, especially for SMEs in landlocked countries such as Mongolia and Kazakhstan. This research helped to develop recommendations that are helpful for SMEs to survive during potential threats such as COVID-19, natural disasters, extreme weather conditions (EWCs), and economic recessions.

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Are ESG Shares a Safe Haven during COVID-19? Evidence from the Arab Region

Cited by 30 publications

References 48 publications

ESG performance in the time of COVID-19 pandemic: cross-country evidence

ESG performance in the time of COVID-19 pandemic: cross-country evidence

Integration and Volatility Spillover Among Environmental, Social and Governance Indices: Evidence from BRICS Countries

The role of SMEs’ resilience capabilities in response to COVID-19 era: Evidence from Kazakhstan and Mongolia

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