IDEAS home Printed from https://ideas.repec.org/a/eee/pacfin/v87y2024ics0927538x24002658.html
   My bibliography  Save this article

The impact of financial sanctions on ESG performance of target countries

Author

Listed:
  • Liu, Xue-Ying
  • Zhao, Xin-Xin
  • Ma, Kun
  • Sharma, Susan Sunila

Abstract

By employing a panel data analysis that covers for 102 countries from 1990 to 2020, this paper investigates the impact of financial sanctions on Environmental, Social, and Governance (ESG) performance of target countries. The results firstly demonstrate that financial sanctions significantly hampered the ESG performance of target countries. More specifically, the implementation of financial sanctions hinders environmental sustainability (E), social equality (S), and corporate governance (G) of target countries respectively. In addition, this paper also finds that financial sanctions significantly decrease ESG performance by restricting foreign capital flow, decreasing the level of globalization and increasing financial risk. Last but not least, this paper concludes that financial development and democracy can create a favorable environment for ESG performance in sanctioned countries and mitigate the adverse effects of financial sanctions.

Suggested Citation

  • Liu, Xue-Ying & Zhao, Xin-Xin & Ma, Kun & Sharma, Susan Sunila, 2024. "The impact of financial sanctions on ESG performance of target countries," Pacific-Basin Finance Journal, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:pacfin:v:87:y:2024:i:c:s0927538x24002658
    DOI: 10.1016/j.pacfin.2024.102513
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X24002658
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.pacfin.2024.102513?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wen, Jun & Yin, Hua-Tang & Chang, Chun-Ping & Tang, Kai, 2024. "How AI shapes greener futures: Comparative insights from equity vs debt investment responses in renewable energy," Energy Economics, Elsevier, vol. 136(C).

    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:eee:pacfin:v:87:y:2024:i:c:s0927538x24002658. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/pacfin .

    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.