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Does environmental, social, and governance performance elevate firm value? International evidence

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  • Gawęda, Adrian

Abstract

The impact of a company's environmental, social, and governance performance (ESGP) on firm value is a widely discussed question; however, findings are not conclusive. Using panel analysis on 5,540 listed companies from 43 countries between 2018 and 2022, we explore the impact of composite ESGP and its pillars on firm value. We investigate how country level of economic and sustainability development moderates this relationship. Our findings reveal (i) negative association between ESGP and firm value, and (ii) it is more pronounced in more developed countries. We contribute by incorporating country development into the debate on ESGP and firm value relationship.

Suggested Citation

  • Gawęda, Adrian, 2025. "Does environmental, social, and governance performance elevate firm value? International evidence," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016684
    DOI: 10.1016/j.frl.2024.106639
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    Keywords

    ESG performance; Firm value; Country development; Economic development; Sustainability; Tobin's Q;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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