Sovereign ESG and corporate investment: New insights from the United Kingdom

Zhang, Dongna; Zhao, Zuoxiang; Lau, Chi Keung Marco

doi:10.1016/j.techfore.2022.121899

Cited by 28 publications

(15 citation statements)

References 51 publications

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“…Refs. [31,32] also revealed that decreasing sovereign governance responsibility performance (e.g., increasing political instability, increasing corruption, decreasing government effectiveness, decreasing voice and accountability) leads to rising market friction distortions, increasing the complexity of the business environment and decreasing the economy growth.…”

Section: Sovereign Esg Performancementioning

confidence: 99%

“…For instance, refs. [32,65] uncovered that sovereign ESG significantly impacts firm-level investment decisions in both Pakistan and the U.K., respectively. Ref.…”

Section: Sovereign Esg Performancementioning

confidence: 99%

“…According to the World Bank Data Bank (2000-2022), the GCC countries had relatively weak sovereign ESG performance with a mean of 0.132 and were less likely to be engaged in environmental, social, and governance activities. In countries with weak ESG responsibilities performance, the financial system is relatively less stable, borrowing costs are comparatively higher, market friction distortions are relatively higher, and ultimately corporate ESG ranks are relatively lower (e.g., [31,32]). Therefore, the banking sector in GCC countries is an interesting case for study and understanding the effect of sovereign ESG as well as other traditional determinants on banking sectors' profitability is essential.…”

Section: Introductionmentioning

confidence: 99%

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Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

Athari,

Saliba,

Abboud

et al. 2024

Sustainability

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The present study particularly aims to probe the quadratic effects of the combined and individual sovereign environmental, social, and governance (ESG) activities on the banking sector’s profitability. Furthermore, we attempt to shed light on the channels through which sovereign ESG practices impact the banking sector’s profitability. Unlike the vast majority of prior works that investigated the sustainability practice–firms’ profitability nexus from the firm level, this study originally probes this relationship from the country level by considering the sovereign ESG sustainability activities. To attain this purpose, we focus on banking sectors operating in Gulf Cooperation Council (GCC) economies and employ the panel-fixed effects and panel-corrected standard errors approaches between 2000 and 2022. Remarkably, the findings uncover that the nexus between combined sovereign ESG and profitability is a non-linear and inversed U-shape (concave), implying that investing in sovereign ESG enhances the banking sector’s profitability. However, after exceeding an inflection point (0.349), its effect turns out to be negative and it develops into activities of destruction. Furthermore, the findings underscore that the association between individual sovereign environmental responsibility and the banking sector’s profitability is a non-linear U-shape (convex), while an inversed U-shaped (concave) nexus is uncovered for the individual sovereign social and governance activities. Moreover, the significant non-linear inverted U-shape for the combined sovereign ESG–stability nexus corroborates that financial stability is a channel through which sovereign ESG significantly impacts profitability.

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Section: Sovereign Esg Performancementioning

confidence: 99%

“…For instance, refs. [32,65] uncovered that sovereign ESG significantly impacts firm-level investment decisions in both Pakistan and the U.K., respectively. Ref.…”

Section: Sovereign Esg Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

Athari,

Saliba,

Abboud

et al. 2024

Sustainability

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show abstract

“…polyethylene terephthalate (PET) plastics included in the SRPS) replace a proportion of bitumen content. Utilising recycled PET aligns with the global call for industries to transition to a circular economy model [ 13 , 14 ]. At the same time, similarly to CA, by adopting secondary materials from plastic bottles natural resources depletion is reduced.…”

Section: Introductionmentioning

confidence: 99%

Comparative life cycle assessment of a novel sustainable road pavement system adopting recycled plastic from PET bottles and carbonated aggregate

Rispoli,

Ajibade

2024

Heliyon

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“…For this purpose, corporate reporting is used, reports on sustainable development, reports on corporate social and environmental responsibility, financial reports, and ESG reports (Breedt et al, 2019). In the works of Fafaliou et al (2022), Zhang et al (2022), and Zhang et al (2021), the scholars note a strong influence of ESG on companies in developed and developing countries: ESG determines the effectiveness of companies, their sustainability to economic crises, investment attractiveness, and strategic perspectives for the development of business.…”

Section: Introductionmentioning

confidence: 99%