IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v16y2024i7p86.html
   My bibliography  Save this article

The Impact of Sustainable Investing on Financial Performance

Author

Listed:
  • Hanan Amin Barakat
  • Nadine Hossam
  • Nour Tarek
  • Sara Mohamed
  • Jana Emad

Abstract

This research project investigates the impact of sustainable investing on financial performance within the Egyptian market, focusing on a selected group of twelve companies listed on the Egyptian Exchange (EGX) that meet predetermined environmental, social, and governance (ESG) criteria. The study addresses the gap in the existing literature by examining the specific relationship between sustainable investment and financial performance in the Egyptian context, within the period of 2018 to 2022. Regression models employed to examine the statistical association between sustainable investment practices and financial performance indicators, while correlation analysis helps to identify the strength and direction of the relationship. Revenue Growth and Total Debt to Equity were used as control variables. The main results of the research project state that there is an impact of sustainable investment on some financial performance of the Egyptian companies listed in ESG index. Study results show that there is no significant relationship between ESG factors and some indicators like current ratio, cash ratio, operating cash flow, debt ratio, turnover ratio, gross margin ratio, Tobin Q, and assets growth. However, it showed that there is a positive correlation between corporate social responsibilities (CSR) or ESG factors and financial performance measures like return on assets (ROA), return on equity (ROE), and return on sales (ROS).

Suggested Citation

  • Hanan Amin Barakat & Nadine Hossam & Nour Tarek & Sara Mohamed & Jana Emad, 2024. "The Impact of Sustainable Investing on Financial Performance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(7), pages 1-86, July.
  • Handle: RePEc:ibn:ijefaa:v:16:y:2024:i:7:p:86
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ijef/article/download/0/0/50338/54581
    Download Restriction: no

    File URL: https://ccsenet.org/journal/index.php/ijef/article/view/0/50338
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rio Murata & Shigeyuki Hamori, 2021. "ESG Disclosures and Stock Price Crash Risk," JRFM, MDPI, vol. 14(2), pages 1-20, February.
    2. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cao Thi Mien Thuy & Trinh Quoc Trung & Nguyen Vinh Khuong & Nguyen Thanh Liem, 2021. "From Corporate Social Responsibility to Stock Price Crash Risk: Modelling the Mediating Role of Firm Performance in an Emerging Market," Sustainability, MDPI, vol. 13(22), pages 1-17, November.
    2. Xueyan Dong & Jingyu Gao & Sunny Li Sun & Kangtao Ye, 2021. "Doing extreme by doing good," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 291-315, March.
    3. Maha Faisal Alsayegh & Rashidah Abdul Rahman & Saeid Homayoun, 2020. "Corporate Economic, Environmental, and Social Sustainability Performance Transformation through ESG Disclosure," Sustainability, MDPI, vol. 12(9), pages 1-20, May.
    4. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    5. Zhen Li & Yitong Sun & Jinhao Liu & Yi Li & Zhifang Zhou, 2024. "Corporate violations and bank debt cost: The insurance effect of corporate social responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4487-4503, September.
    6. Girardone, Claudia & Kokas, Sotirios & Wood, Geoffrey, 2021. "Diversity and women in finance: Challenges and future perspectives," Journal of Corporate Finance, Elsevier, vol. 71(C).
    7. Alexandra ZBUCHEA & Florina PÎNZARU, 2017. "Tailoring CSR Strategy to Company Size?," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(3), pages 415-437, September.
    8. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    9. Stefan Lewandowski, 2017. "Corporate Carbon and Financial Performance: The Role of Emission Reductions," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1196-1211, December.
    10. Will, Matthias Georg & Hielscher, Stefan, 2013. "How do companies invest in corporate social responsibility? An ordonomic contribution for empirical CSR research," Discussion Papers 2013-3, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    11. Fabien Martinez, 2014. "Corporate strategy and the environment: towards a four-dimensional compatibility model for fostering green management decisions," Post-Print hal-02887618, HAL.
    12. Samuel Adomako & Nguyen P. Nguyen, 2020. "Politically connected firms and corporate social responsibility implementation expenditure in sub‐Saharan Africa: Evidence from Ghana," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2701-2711, November.
    13. Block, Joern & Wagner, Marcus, 2014. "Ownership versus management effects on corporate social responsibility concerns in large family and founder firms," Journal of Family Business Strategy, Elsevier, vol. 5(4), pages 339-346.
    14. Driss Rahma & Jarboui Anis, 2015. "Contribution of Social Disclosure and Organizational Culture to Create Financial Value of Tunisian Companies," Growth, Asian Online Journal Publishing Group, vol. 2(1), pages 10-17.
    15. Yi Liu & Wenqian Li & Yuan Li, 2020. "Ambidexterity between low cost strategy and CSR strategy: contingencies of competition and regulation," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 633-660, September.
    16. Karen Maas & Kellie Liket, 2011. "Talk the Walk: Measuring the Impact of Strategic Philanthropy," Journal of Business Ethics, Springer, vol. 100(3), pages 445-464, May.
    17. Michaela Haase & Emmanuel Raufflet, 2017. "Ideologies in Markets, Organizations, and Business Ethics: Drafting a Map: Introduction to the Special Issue," Journal of Business Ethics, Springer, vol. 142(4), pages 629-639, June.
    18. Saurabh Mishra & Sachin Modi, 2013. "Positive and Negative Corporate Social Responsibility, Financial Leverage, and Idiosyncratic Risk," Journal of Business Ethics, Springer, vol. 117(2), pages 431-448, October.
    19. Wang Hongxin & Mohammed Arshad Khan & Jian Zhenqiang & Laura-Mariana Cismaș & Mohammad Athar Ali & Usama Saleem & Lucia Negruț, 2022. "Unleashing the Role of CSR and Employees’ Pro-Environmental Behavior for Organizational Success: The Role of Connectedness to Nature," Sustainability, MDPI, vol. 14(6), pages 1-22, March.
    20. Jun Chen & Wang Dong & Jamie Tong & Feida Zhang, 2018. "Corporate Philanthropy and Tunneling: Evidence from China," Journal of Business Ethics, Springer, vol. 150(1), pages 135-157, June.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    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:ibn:ijefaa:v:16:y:2024:i:7:p:86. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    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.