ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

Xu, Xin; Liu, Zizhen

doi:10.3390/su15086771

Cited by 3 publications

(4 citation statements)

References 68 publications

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“…Eventually, in some cases, the governance will cause some negative effects on corporate profitability [10]. Additionally, the ROA can be impacted by ESG positively, which is consistent with Xu and Liu (2023), but not significantly due to though higher ESG can partly represent better sustainability, it is not that obvious in the short term [7].…”

Section: Discussionsupporting

confidence: 73%

“…Based on the previous research, the result of D'Amato, D'Ecclesia, and Levantesi (2023) that ESG score corelates to EBIT positively in most cases and the finding which done by Xu and Liu (2023) proved that ROA has a significant positive correlation with ESG [6] [7]. Although the samples from that research are from the Euro-Stoxx 600 and the Chinese A-share with cultural distance data, their outcome may still have some research basis for the Chinese forestry and paper industry [6][7].…”

Section: Hypothesismentioning

confidence: 96%

“…The research methodology is adopted by D'Amato, D'Ecclesia, and Levantesi (2023) and Xu and Liu (2023), which used Earnings before Interest and Tax (EBIT) and Return on Assets (ROA) to measure the profitability of companies respectively, and both of them [6] [7]. The former one is to present the earnings of companies directly eliminating the effect of liabilities and taxation of government.…”

Section: Profitability Of Corporationsmentioning

confidence: 99%

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The Correlation Between Corporate Profitability and ESG Ratings: Samples from Forestry and Paper Industry

Zou

2024

Advances in Economics, Business and Management Research

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Recently, the sustainability and social responsibility of business operation have become more and more important in the criteria to evaluate the value of a company, which cause the environmental, social, and governance (ESG) scores to be valued. This study examined the impact of the ESG score and profitability of the year before on the profitability of Chinese forestry companies, which is weighed by EBIT and ROA, with regression to determine that does ESG score will affect the profitability of forestry corporations or not. The findings suggest that the scores have a significant correlation with the EBIT while all of the scores do not show a significant effect on the ROA. At the same time, the findings also show that the ROA is affected by the ROA in the year before extremely significant, while the influence of the EBIT in the year before to the EBIT in one year later is not as obvious as the effect of the previous ROA generated to the later one.

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Section: Discussionsupporting

confidence: 73%

Section: Hypothesismentioning

confidence: 96%

Section: Profitability Of Corporationsmentioning

confidence: 99%

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The Correlation Between Corporate Profitability and ESG Ratings: Samples from Forestry and Paper Industry

Zou

2024

Advances in Economics, Business and Management Research

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“…Nazir et al [34] also reported the potential positive influence of ESG scores on the cost of capital (COC) of tech firms. A recent study [35] examined the role of ESG scores in determining the profitability of Chinese manufacturing multinational firms; additionally, the study also assessed the moderating effects of culture between ESG and firm profitability. The findings suggested a positive and significant effect of ESG on firm performance, while cultural distance also moderated this relationship.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The Role of Environment, Social, and Governance Performance in Shaping Corporate Current and Future Value: The Case of Global Tech Leaders

Kong,

Akbar,

Poulova

2023

Sustainability

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Corporations that prioritize Environment, Social, and Governance (ESG) considerations tend to have a more sustainable approach to business operations with a lower impact on the environment and society. Extant literature is available on the impact of ESG on firm performance, risk-taking, profitability, the cost of capital, cash flows, and default risk. However, very little is known about the role of ESG performance in shaping the current and future value of a corporation. Similarly, hi-tech firms, being a part of the rapidly growing sector of the world, are facing greater scrutiny from investors, regulators, and consumers to demonstrate their commitment to sustainability and social responsibility. This paper investigates the effect of ESG performance on the corporate present and future value of top global tech leaders for a period of eight years (2010 to 2017). Panel data techniques such as the fixed effects model and random effects model based on the Hausman test were used to observe this relationship. Earnings per share (EPS) and the price-to-earnings ratio (PE ratio) were used as a measure of firm current and future value, respectively. The results revealed that ESG has a significantly positive association with both proxies of corporate value of the top global tech companies. However, as compared to EPS, it had a more pronounced impact on the PE ratio of the sampled firms. Unlike many earlier studies that claimed that the ESG score impacts firm performance in the corresponding period, the present research is novel, as it asserts that investors are not only benefiting from firms’ higher investment in ESG through an increase in EPS but are also highly optimistic about the future performance of the firm and thus are paying more for each dollar of earnings. These finding contribute to the existing body of literature on the ESG and firm value nexus and are supported by the stakeholder theory of corporate social responsibility. Thus, policymakers for the tech sector should pay keen attention to firms’ ESG performance to earn the long-term trust of shareholders.

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Philosophy meets culture: How existential reflection and 'Arema Spirit' shape startup bootstrapping strategies?

Iswari,

Handayati,

Ery Tri Djatmika Rudijanto Wahju

et al. 2024

RJAH

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Existential philosophy provides a framework to understand the motivations and strategic decisions of startup founders in navigating uncertainty and limited resources. This study explores the interplay between existential reflection and the 'Arema Spirit,' a cultural ethos in Malang, Indonesia, in shaping financial bootstrapping strategies. Using a qualitative phenomenological approach, data was collected from 30 creative startup founders through in-depth interviews, participatory observations, and qualitative questionnaires. The analysis emphasizes how founders integrate philosophical reflection with local cultural values to balance autonomy, ethical responsibility, and resource efficiency. The findings reveal that existential reflection fosters strategic independence and resilience while the 'Arema Spirit' inspires ethical and community-oriented decisions. This dynamic is encapsulated in the Bootstrapping Existential Reflection Cycle, an iterative framework connecting existential values, bootstrapping practices, and practical innovation. The study highlights the role of cultural identity in entrepreneurial strategy, bridging philosophy, and practice in navigating startup challenges.

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ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

Cited by 3 publications

References 68 publications

The Correlation Between Corporate Profitability and ESG Ratings: Samples from Forestry and Paper Industry

The Correlation Between Corporate Profitability and ESG Ratings: Samples from Forestry and Paper Industry

The Role of Environment, Social, and Governance Performance in Shaping Corporate Current and Future Value: The Case of Global Tech Leaders

Philosophy meets culture: How existential reflection and 'Arema Spirit' shape startup bootstrapping strategies?

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