ESG Performance of Multinational Companies and Stock Price Crash: Evidence from Korea

Lee, Jeong‐Hwan; Cho, Jin Hyung; Kim, Bong Joon

doi:10.11130/jei.2022.37.3.523

Cited by 3 publications

(2 citation statements)

References 11 publications

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“…He et al found that firms with high ESG performance have better risk-taking capacity, and the contribution of ESG performance to corporate risk-taking capacity is more pronounced in firms with lower information transparency and weaker corporate governance [62]. Lee et al concluded that firms with improved ESG performance could significantly reduce the risk of share price crashes [63]. Sciarelli et al argue that integrating ESG criteria, gradually incorporating ESG criteria into corporate financial communications, and improving the accuracy and transparency of disclosure on relevant issues can help make investors' investments more efficient and promote sustainable financial growth [64].…”

Section: Esg Performancementioning

confidence: 99%

Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III

Ling

Zhang

2023

Sustainability

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With the growing importance of sustainable development, ESG is receiving attention from governments, firms, and investors. This study uses the reform of China’s tax inspection system—Golden Tax Project III—as a quasi-natural experiment to examine the impact of the enhanced tax administration on firms’ ESG performance with a sample of Chinese A-share listed companies from 2008 to 2020. The findings, which were identified via a time-varying difference-in-differences (time-varying DID) approach, indicate that Golden Tax Project III significantly reduces firms’ ESG performance and has the most significant impact on the environmental dimension and the minor impact on the social dimension. The negative impact of Golden Tax Project III on ESG performance is more substantial among non-state firms and firms in regions with higher levels of marketization than other firms. The mechanism test shows that Golden Tax Project III negatively affects ESG performance by increasing the tax burden on firms. The moderating effect test shows that tax incentives can effectively mitigate the dampening effect of strengthened tax administration on ESG performance. This study enriches the literature on the factors influencing firms’ ESG performance to a certain extent; it helps the government use taxation policies to inspire firms to improve ESG performance, contributing to sustainable development.

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Section: Esg Performancementioning

confidence: 99%

Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III

Ling

Zhang

2023

Sustainability

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“…In the literature review shows that ESG disclosure can mitigate corporate crash risk (Bae et al, 2021;Dumitrescu, and Zakriya, 2021;Hua Fan , and Michalski, 2020;Silva, 2022), both from economic, social and governance aspects which correlate negatively with stock price crash risk (Lee et al, 2022, andLi et al, 2022). Aside from being a crash risk mitigation factor, company involvement and intention in ESG disclosure is related to the type of organizational strategy.…”

Section: Introductionmentioning

confidence: 99%

The Moderating Role of Esg Disclosure on Firm Strategy and Stock Price Crash Risk

Gregorius Jeandry,

Nurdin

2023

JRABA

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This study aims to examine the effect of the company's business strategy on the stock price crash risk and examine the role of ESG disclosure as moderation in the relationship between business strategy and the stock price crash risk. The study population includes all companies listed on the Indonesia Stock Exchange (IDX) for the period 2017–2022. The sampling technique used was saturation sampling, with a total of 609 observations. Data collection techniques use content analysis. The data analysis technique uses ordinary least squares. This study found that firm strategy with the prospector typology affect the stock price crash risk, while the defenders and analyzers typologies have no effect on the stock price crash risk. ESG disclosure can weaken the effect of the business strategies of the prospector, defender, and analyzer typologies on stock price crash risk. Additional analysis found that ESG can reduce the risk of future stock price crashes. The contribution to signal theory is that there is consistently a strategic motivation for management to control good and bad information for the public. Bad information can cause the risk of price crashes to be higher than good information. Through ESG disclosure, it can provide positive signals to the public so that the risk of stock price crashes is low. The practical contribution for investors is as an investment strategy by paying more attention to the tendency of stock price crashes. For the government as a basis for making economic policies to create a well-maintained business climate.

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An Analysis of Key Environmental, Social and Governance (ESG) Metrics in Several Important Manufacturing Segments of India

Bania,

Biswas

2024

Indian Journal of Corporate Governance

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The worldwide environmental issues present an unending cycle of transition and with it comes an increasing prevalence of environmental, social and governance (ESG) disclosure initiatives which serve as a path towards encouragement of ethical and sustainable business operations and influencing the long-term viability of business. By disclosing ESG aspects, firms can increase their credibility and interest to investors who value sustainable investments. India’s manufacturing sector has consistently contributed over 15% of the country’s GDP. In response to the acute need for diversification of the economy and employment generation, the Indian government has implemented significant efforts to enhance manufacturing opportunities and this industry must gradually adopt sustainable manufacturing practices. This study has primarily focused on the leading manufacturing sub-sectors, namely oil, chemical, cement, metal and automobile industries. The study identifies those sub-sectors which are more progressive towards sustainability. Non-parametric tests, such as the Kruskal-Wallis test, Dunn’s test (post hoc test) and the Wilcoxon signed rank test have disclosed significant variations in ESG performances within the manufacturing sectors. These findings will be valuable to potential investors in identifying those segments that do align with their investment decisions and will also encourage companies to recognize and address their ESG performance gaps.

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ESG Performance of Multinational Companies and Stock Price Crash: Evidence from Korea

Cited by 3 publications

References 11 publications

Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III

Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III

The Moderating Role of Esg Disclosure on Firm Strategy and Stock Price Crash Risk

An Analysis of Key Environmental, Social and Governance (ESG) Metrics in Several Important Manufacturing Segments of India

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