Investment in ESG Projects and Corporate Performance of Multinational Companies

Cherkasova, Victoria; Nenuzhenko, Irina

doi:10.11130/jei.2022.37.1.54

“…There is a negative relationship between GDPG rates and ESG scores in 25 OECD countries in the period 2008-2019(Al Amosh & Khatib, 2023. Financial investments in ESG projects are positively associated to economic growth in Latin America countries (Cherkasova & Nenuzhenko, 2022). There is a positive relationship between GDPG rate and 𝐶𝑂 2 emissions suggesting that the E component of the ESG model does not improve the economic growth (Ho et al, 2019).…”

Section: Esg and Gdpmentioning

confidence: 99%

The Role of GDP Growth in the Esg Approach at World Level

Costantiello,

Leogrande

2024

Preprint

0

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We analyze the question of GDP Growth-GDPG rate in the context of Environmental, Social and Governance-ESG framework. We use World Bank data for 193 countries in the period 2011-2020 using different econometric techniques i.e., Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled Ordinary Least Squares-OLS. We found that GDPG rate is positively associated, among others, to “Government Effectiveness” and “Prevalence of Undernourishment” and negatively associated among others to “Unemployment” and “Research and Development Expenditure”. Furthermore, we have applied the k-Means algorithm optimized with the Elbow method and we found the presence of four clusters in the sense of GDPG rate. Finally, we confront eight machine learning algorithms to predict the value of GDPG rate and we found that the Polynomial Regression is the best predictor. The Polynomial Regression predicts an increase of GDPG rate equal to 2.88% on average for the analysed countries.

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“…There is a negative relationship between GDPG rates and ESG scores in 25 OECD countries in the period 2008-2019 [17]. Financial investments in ESG projects are positively associated to economic growth in Latin America countries [18]. There is a positive relationship between GDPG rate and emissions suggesting that the E component of the ESG model does not improve the economic growth [19].…”

Section: ) Literature Reviewmentioning

confidence: 99%

The Role of GDP Growth in the ESG Approach at World Level

Leogrande¹,

Costantiello²

2023

Preprint

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We analyze the question of GDP Growth-GDPG rate in the context of Environmental, Social and Governance-ESG framework. We use World Bank data for 193 countries in the period 2011-2020 using different econometric techniques i.e., Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled Ordinary Least Squares-OLS. We found that GDPG rate is positively associated, among others, to “Government Effectiveness” and “Prevalence of Undernourishment” and negatively associated among others to “Unemployment” and “Research and Development Expenditure”. Furthermore, we have applied the k-Means algorithm optimized with the Elbow method and we found the presence of four clusters in the sense of GDPG rate. Finally, we confront eight machine learning algorithms to predict the value of GDPG rate and we found that the Polynomial Regression is the best predictor. The Polynomial Regression predicts an increase of GDPG rate equal to 2.88% on average for the analysed countries.

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“…Pineau et al [62] assess ESG factors in sovereign credit risk and demonstrate that the evolution of ESG is influenced by the level of economic development of a country. Cherkasova and Nenuzhenko's [63] study suggests that international firms in developed Asia or North America are more likely to succeed in ESG development, while Latin American firms might struggle.…”

Section: Environmental Social and Governance (Esg)mentioning

confidence: 99%

Do ESG Risk Scores Influence Financial Distress? Evidence from a Dynamic NDEA Approach

Antunes

¹

,

Fonseca

²

,

Tan

³

2023

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Financial distress is a research topic in finance that has attracted attention from academia following past financial crises. Although previous studies associate financial distress with several elements, the relationship between distress and ESG has not been broadly explored. This paper investigates these issues by elaborating a Dynamic Network DEA model to address the underlying connections between accounting and financial indicators. Thus, a model that includes profit and loss, balance sheet, and capital and operating expenditures indicators is demonstrated under the dynamic network structure to compute financial-distress efficiency scores. Then, the impact of carryovers is considered for the accurate calculation of efficiency scores for the three substructures. The influence of contextual variables, such as socioeconomic and macroeconomic variables, and whether the firm owns an ESG Risk Score or not, is assessed through a stochastic non-linear model that combines three distinct regression types: Simplex, Tobit, and Beta. The results indicate that firms that hold an ESG Risk Score are less prone to be in financial distress, and Governance Score is negatively associated with financial distress efficiency.

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Investment in ESG Projects and Corporate Performance of Multinational Companies

Cited by 22 publications

References 23 publications

The Role of GDP Growth in the Esg Approach at World Level

The Role of GDP Growth in the Esg Approach at World Level

The Role of GDP Growth in the ESG Approach at World Level

Do ESG Risk Scores Influence Financial Distress? Evidence from a Dynamic NDEA Approach

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