The impact of ESG on financial performance: a revisit with a regression discontinuity approach
Abstrak
Abstract This study revisits the question of “whether firms are doing well by doing good?”. We examine shareholders-sponsored corporate socially responsible (CSR) proposals related to Environmental, Social, and Governance (ESG) that are voted to pass or fail by a small margin. The adoption of those “close call” proposals is regarded as equivalent to a random assignment of CSR policies and, therefore, provides a quasi-experimental setting to capture the causal influence of CSR on firm performance. We apply the regression discontinuity design (RDD) and find that CSR proposals’ passage leads to a significant positive abnormal return on the voting day. The results are robust with both parametric and nonparametric approaches of RDD and different polynomial orders. However, we fail to identify a significant change in financial performance in the long-term. One possible reason is that passing a CSR proposal could be symbolic, rather than substantial.
Topik & Kata Kunci
Penulis (4)
Ziwei Xu
Wenxuan Hou
Brian G. M. Main
Rong Ding
Akses Cepat
- Tahun Terbit
- 2022
- Sumber Database
- DOAJ
- DOI
- 10.1007/s43979-022-00025-5
- Akses
- Open Access ✓