IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2024-06-25.html
   My bibliography  Save this article

Sectoral Performance of ESG Enabled Stocks during COVID-19 Pandemic in the Indian Stock Market

Author

Listed:
  • Prashant Sharma

    (Jindal School of Banking and Finance (JSBF), O. P. Jindal Global University, Sonipat, Haryana, India)

  • Geetika Arora

    (University of the People, Pasadena, California, USA)

  • Sushil Kalyani

    (NIIT University Neemrana, Rajasthan, India)

  • Hanna Olasiuk

    (Jindal Global Business School, O. P. Jindal Global University Sonipat, Haryana, India)

  • Padmini Jindal

    (Department of Commerce, Manipal Academy of Higher Education (MAHE), Manipal, Karnataka, India)

Abstract

Over past one decade, there is significant rise in Environment, Social and Governance (ESG) enabled investment practices across the globe and Indian economy is no exception to that. The ESG-enabled investment options provide better investment avenues for investment for retail and institutional investors by ensuring the long-term sustainability of the business. The present study tries to assess whether there is any impact of ESG scores on performance of stocks at the time of COVID-19 pandemic period. The study compares the performance of stocks with high ESG score vis-à-vis stocks with low ESG scores during COVID-19 period for different sectors of Indian stock market. The study considers the data of 312 sample firms listed on BSE 500 index. The event study methodology is used to assess the impact of COVID-19 on Indian stocks. The stocks were further divided into three categories high score (top 30% of firms), medium (middle 40% of firms) and low (bottom 30% of the firms). The results of the study suggest that the investors were more confident about the performance and revival of firms that carry high ESG scores than firms with low ESG scores. The investors are confident about the long-term prospects and sustainability of the firms, and they tend to hold their investment in the firms with high ESG scores.

Suggested Citation

  • Prashant Sharma & Geetika Arora & Sushil Kalyani & Hanna Olasiuk & Padmini Jindal, 2024. "Sectoral Performance of ESG Enabled Stocks during COVID-19 Pandemic in the Indian Stock Market," International Journal of Economics and Financial Issues, Econjournals, vol. 14(6), pages 232-238, October.
    • Handle: RePEc:eco:journ1:2024-06-25
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/17187/8297
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/17187
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Vinay Khandelwal & Prashant Sharma & Varun Chotia, 2023. "ESG Disclosure and Firm Performance: An Asset-Pricing Approach," Risks, MDPI, vol. 11(6), pages 1-22, June.
    2. Ewens, Michael & Townsend, Richard R., 2020. "Are early stage investors biased against women?," Journal of Financial Economics, Elsevier, vol. 135(3), pages 653-677.
    3. Agus Sugiarto & Ni Nyoman Puspani & Fara Fathia, 2023. "ESG Leverage towards Stock Performance in Indonesia Stock Exchange," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 593-606, September.
    4. Yanuar Trisnowati & Noer A. Achsani & Roy Sembel & Trias Andati, 2022. "The Effect of ESG Score, Financial Performance, and Macroeconomics on Stock Returns during the Pandemic Era in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 166-172, July.
    5. Yashraj Varma & Renuka Venkataramani & Parthajit Kayal & Moinak Maiti, 2021. "Short-Term Impact of COVID-19 on Indian Stock Market," JRFM, MDPI, vol. 14(11), pages 1-15, November.
    6. Umar, Zaghum & Kenourgios, Dimitris & Papathanasiou, Sypros, 2020. "The static and dynamic connectedness of environmental, social, and governance investments: International evidence," Economic Modelling, Elsevier, vol. 93(C), pages 112-124.
    7. Jeremy Galbreath, 2013. "ESG in Focus: The Australian Evidence," Journal of Business Ethics, Springer, vol. 118(3), pages 529-541, December.
    8. Rahul Verma & Rajesh Mohnot, 2023. "Relative Impact of the U.S. Energy Market Sentiments on Stocks and ESG Index Returns: Evidence from GCC Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 290-300, March.
    9. Sandra Rousseau & Nick Deschacht, 2020. "Public Awareness of Nature and the Environment During the COVID-19 Crisis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 1149-1159, August.
    10. Jae-Joon Han & Hyun Jeong Kim & Jeongmin Yu, 2016. "Empirical study on relationship between corporate social responsibility and financial performance in Korea," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 1(1), pages 61-76, December.
    11. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
    12. Guidolin, Massimo & Hansen, Erwin & Pedio, Manuela, 2019. "Cross-asset contagion in the financial crisis: A Bayesian time-varying parameter approach," Journal of Financial Markets, Elsevier, vol. 45(C), pages 83-114.
    13. Mohanty, Pitabas & Mishra, Supriti, 2024. "Did the Indian stock market overreact to Covid-19?," The North American Journal of Economics and Finance, Elsevier, vol. 70(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gaurav Jyoti & Ashu Khanna, 2024. "How does sustainability performance affect firms' market performance? An empirical investigation in the Indian context," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 20457-20483, August.
    2. Zengfu Li & Liuhua Feng & Zheng Pan & Hafiz M. Sohail, 2022. "ESG performance and stock prices: evidence from the COVID-19 outbreak in China," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.
    3. Ann Susan Thomas & Ambili Jayachandran & Ajithakumari Vijayappan Nair Biju, 2024. "Strategic mapping of the environmental social governance landscape in finance – A bibliometric exploration through concepts and themes," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4428-4453, September.
    4. Corbet, Shaen & Larkin, Charles & McMullan, Caroline, 2020. "The impact of industrial incidents on stock market volatility," Research in International Business and Finance, Elsevier, vol. 52(C).
    5. Ali, Shoaib & Naveed, Muhammad & Yousaf, Imran & Khattak, Muhammad Sualeh, 2024. "From cryptos to consciousness: Dynamics of return and volatility spillover between green cryptocurrencies and G7 markets," Finance Research Letters, Elsevier, vol. 60(C).
    6. Oxelheim, Lars & Rafferty, Michael, 2005. "On the static efficiency of secondary bond markets," Journal of Multinational Financial Management, Elsevier, vol. 15(2), pages 117-135, April.
    7. DAVID E. ALLEN & MICHAEL McALEER & ROBERT J. POWELL & ABHAY K. SINGH, 2018. "Non-Parametric Multiple Change Point Analysis Of The Global Financial Crisis," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 1-23, June.
    8. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," PIER Discussion Papers 203, Puey Ungphakorn Institute for Economic Research.
    9. Denise M. Keele & Susan DeHart, 2011. "Partners of USEPA Climate Leaders: an Event Study on Stock Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 20(8), pages 485-497, December.
    10. Carol Alexander & Anca Dimitriu, 2003. "Equity Indexing: Conitegration and Stock Price Dispersion: A Regime Switiching Approach to market Efficiency," ICMA Centre Discussion Papers in Finance icma-dp2003-02, Henley Business School, University of Reading.
    11. Yanju Luo & Jinyang Deng & Chad Pierskalla & Ju-hyoung Lee & Jiayao Tang, 2022. "New Ecological Paradigm, Leisure Motivation, and Wellbeing Satisfaction: A Comparative Analysis of Recreational Use of Urban Parks before and after the COVID-19 Outbreak," Land, MDPI, vol. 11(8), pages 1-28, August.
    12. Thomas Delcey, 2019. "Samuelson vs Fama on the Efficient Market Hypothesis: The Point of View of Expertise [Samuelson vs Fama sur l’efficience informationnelle des marchés financiers : le point de vue de l’expertise]," Post-Print hal-01618347, HAL.
    13. Marcos Albuquerque Junior & José António Filipe & Paulo de Melo Jorge Neto & Cristiano da Silva, 2021. "The Study of Events Approach Applied to the Impact of Mergers and Acquisitions on the Performance of Consulting Engineering Companies," Mathematics, MDPI, vol. 9(2), pages 1-20, January.
    14. Ye Zhang, 2020. "Discrimination in the Venture Capital Industry: Evidence from Field Experiments," Papers 2010.16084, arXiv.org, revised Aug 2022.
    15. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 541-571.
    16. Supino, Enrico & Tenucci, Andrea & Di Nanna, Gianluca, 2024. "Sports failures and stock returns between rationality and emotionality: Evidence from the UEFA Champions League," Research in International Business and Finance, Elsevier, vol. 70(PB).
    17. Hugo S. Gonçalves & Sérgio Moro, 2023. "On the economic impacts of COVID‐19: A text mining literature analysis," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 375-394, February.
    18. Kevin Krieger & David Peterson, 2009. "Predicting stock splits with the help of firm-specific experiences," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 33(4), pages 410-421, October.
    19. Chia-Lin Chang & Shu-Han Hsu & Michael McAleer, 2018. "An Event Study Analysis of Political Events, Disasters, and Accidents for Chinese Tourists to Taiwan," Sustainability, MDPI, vol. 10(11), pages 1-77, November.
    20. Linda Allen & Julapa Jagtiani & Stavros Peristiani & Anthony Saunders, 2002. "The role of bank advisors in mergers and acquisitions," Staff Reports 143, Federal Reserve Bank of New York.

    More about this item

    Keywords

    ESG Scores; COVID-19; Indian Stock Market; Event Study; Sectoral Performance;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2024-06-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.