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Interlinkage between corporate social, environmental performance and financial performance: Firm-mediators in a multi-country context

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  • Gupta, Ranjan Das
  • Deb, Soumya G.

Abstract

The current study explores the interlinkage between corporate social, environmental performance (CSP) and financial performance of a firm, mediated by its global exposure and corporate governance. We conduct a dynamic fixed effect 2SLS-IV analysis on a comprehensive multi-country data-set and find that financial performance is not significantly impacted by CSP but there is a positive influence when it is mediated by lower internationalization. We also find that a more independent board lowers such value-destroying managerial activities, while the presence of women directors on board, dampens that positive influence of low internationalisation in strengthening financial performance through higher CSP.

Suggested Citation

  • Gupta, Ranjan Das & Deb, Soumya G., 2023. "Interlinkage between corporate social, environmental performance and financial performance: Firm-mediators in a multi-country context," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322005633
    DOI: 10.1016/j.frl.2022.103386
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    More about this item

    Keywords

    Social and environmental performance; Financial performance; Corporate governance;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • G3 - Financial Economics - - Corporate Finance and Governance

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