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Financial Stability in Companies with High ESG Scores: Evidence from North America Using the Ohlson O-Score

Author

Listed:
  • Anton Lisin

    (Department of Financial Markets and Banks, Financial University under the Government of the Russian Federation, 125167 Moscow, Russia)

  • Andrei Kushnir

    (Institute of Law, Russian University of Transport, 127055 Moscow, Russia)

  • Alexey G. Koryakov

    (Department of Modern Management Technologies, MIREA-Russian Technological University, 119454 Moscow, Russia)

  • Natalia Fomenko

    (Department of Theory and Technology of Management, Plekhanov Russian University of Economics, 117997 Moscow, Russia)

  • Tatyana Shchukina

    (Department of Applied Law, MIREA-Russian Technological University, 119454 Moscow, Russia)

Abstract

The benefits and advantages of the incorporation of ESG (Environmental, Social, Governing)-related policies have been discussed extensively. However, research articles focus not only on the socioecological aspects of Corporate Social Responsibility (CSR) but also on the underlying effects on a corporation’s corporate financial performance (CFP). In this regard, the current study aims to analyze the impact of ESG parameters on corporations’ financial stability. A sample size of 691 companies in North American countries was investigated in order to test the hypothesis that ESG has an effect on the likelihood of a company going bankrupt using the Ohlson O-score. This is conducted using regression models and the Pearson correlation coefficient. Furthermore, a follow-up hypothesis on the relationship between firm size and ESG is also tested in order to evaluate a tendency of corporate growth through ESG-based sustainable development. The results of the study conclude that the governing pillar of ESG factors has the highest positive impact on corporations’ financial success. Furthermore, the analysis conducted in the study with its sample size confirms the hypothesis that larger firms tend to have higher ESG scores.

Suggested Citation

  • Anton Lisin & Andrei Kushnir & Alexey G. Koryakov & Natalia Fomenko & Tatyana Shchukina, 2022. "Financial Stability in Companies with High ESG Scores: Evidence from North America Using the Ohlson O-Score," Sustainability, MDPI, vol. 14(1), pages 1-13, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:1:p:479-:d:716689
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    Cited by:

    1. Vicente Fruet & Daniel Campos & Lorena Caridad, 2023. "Itaipu Binational Dam: A Quantitative Analysis of the Economic and Social Impacts in Paraguay. Successful or not?," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Jesús Dacio Villarreal Samaniego & Roberto Joaquín Santillán-Salgado & Luis Jacob Escobar Saldivar, 2022. "The Global Automotive Industry Stock Returns During the COVID-19 Pandemic," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(4), pages 1-21, Octubre -.
    3. Puji Handayati & Tomy Rizky Izzalqurny & Slamet Fauzan & Nurus Shobah, 2022. "The phenomenon of financial distress of manufacturing companies in Indonesia during the Covid-19 Pandemic," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(9), pages 166-173, December.
    4. Goodhope Hance Mkaro & Lin Sea Lau & Chee Keong Choong, 2023. "The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2282812-228, October.
    5. Simone Letta & Pasquale Mirante, 2023. "Investigating the determinants of corporate bond credit spreads in the euro area," Temi di discussione (Economic working papers) 36, Bank of Italy, Economic Research and International Relations Area.
    6. Haifei Wang & Hongjun Wu & Peter Humphreys, 2022. "Chinese Merchant Group Culture, Corporate Social Responsibility, and Cost of Debt: Evidence from Private Listed Firms in China," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    7. Meles, Antonio & Salerno, Dario & Sampagnaro, Gabriele & Verdoliva, Vincenzo & Zhang, Jianing, 2023. "The influence of green innovation on default risk: Evidence from Europe," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 692-710.
    8. Alexandre Clément & Élisabeth Robinot & Léo Trespeuch, 2022. "Improving ESG Scores with Sustainability Concepts," Sustainability, MDPI, vol. 14(20), pages 1-15, October.
    9. Sergey N. Kukushkin & Aleksei V. Bogoviz & Yuliya V. Chutcheva & Larisa S. Korobeinikova & Svetlana V. Lobova, 2024. "Target SAP-LAP Model for Sustainable Development of Russian Universities in the Decade of Science and Technology," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 25(1), pages 123-138, September.
    10. Mohamad Azwan Md Isa & Norashikin Ismail & Mohd Halim Kadri, 2024. "Sustainability Performance and Corporate Financial Stability of Shariah-Compliant Companies in Malaysia: The Moderating Effects of Ownership Concentration," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(14), pages 28-46, October.
    11. Hongni Zhang & Xiangyi Xu, 2023. "Innovative Technology Method Based on Evolutionary Game Model of Enterprise Sustainable Development and CNN–GRU," Sustainability, MDPI, vol. 15(5), pages 1-17, February.

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