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The nexus of ESG requirements and industry concentration

Author

Listed:
  • Yenpo Tai
  • Mei‐Yu Lee
  • Chu‐Ping Lo
  • Su‐Ying Hsu

Abstract

This paper examines the environmental, social, and governance (ESG) requirements for an industry in an n‐oligopolistic model and investigates the relationship between the degree of industry concentration and the degree of ESG requirements. It is shown that the factors influencing the degree of ESG requirements include the number of firms, the elasticity of market demand, and the market concentration ratio. In the case of linear market demand, the degree of requirements is negatively affected by firm number only, regardless of the elasticity of market demand or market concentration ratio. In addition, the degree of ESG requirements is positively (negatively) related to the industry profit/concentration, when market demand is convex (concave). This paper demonstrates that the degree of ESG requirements is sensitive to firm number, market demand, and market concentration ratio and serves as a pragmatic reference for the government.

Suggested Citation

  • Yenpo Tai & Mei‐Yu Lee & Chu‐Ping Lo & Su‐Ying Hsu, 2024. "The nexus of ESG requirements and industry concentration," Bulletin of Economic Research, Wiley Blackwell, vol. 76(3), pages 713-725, July.
    • Handle: RePEc:bla:buecrs:v:76:y:2024:i:3:p:713-725
    DOI: 10.1111/boer.12442
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    References listed on IDEAS

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