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Does ESG disclosure really influence the firm performance? Evidence from India

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  • Veeravel, V
  • Murugesan, Vijaya Prabhagar
  • Narayanamurthy, Vijayakumar

Abstract

In this paper, we examine the influence of ESG disclosure scores on firm performance of companies listed in the National Stock Exchange (NSE). The study uses 167 sample firms from 2010 to 2020. We capitalise overall ESG disclosure scores taken as a proxy to measure the effect of sustainability disclosure on firm performance. Further, we consider the return on assets (ROA), return on equity (ROE), Tobin’s Q, and Price Earnings ratio (P/E ratio) as firm performance measures. We employ dynamic panel data regression analysis to examine the influence of ESG disclosures on performance of the firm. In order, to address the endogeneity issues, we apply Generalised Method of Moments (GMM) model. The study results show a positive relationship between ESG disclosure and firm performance. It suggests that companies’ desire to enhance their performance need to pay more attention towards sustainability disclosures.

Suggested Citation

  • Veeravel, V & Murugesan, Vijaya Prabhagar & Narayanamurthy, Vijayakumar, 2024. "Does ESG disclosure really influence the firm performance? Evidence from India," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 193-202.
    • Handle: RePEc:eee:quaeco:v:95:y:2024:i:c:p:193-202
    DOI: 10.1016/j.qref.2024.03.008
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    More about this item

    Keywords

    Sustainability; ESG disclosure; Firm performance; GMM;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • 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

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