Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack

This paper examines whether a firm's financial performance (FP) is associated with superior environmental, social and governance (ESG) scores in emerging markets of multinationals in Latin America. The study addresses the current research gap on this issue; it develops hypotheses and tests them...

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Veröffentlicht in:Journal of business ethics Jg. 168; H. 2; S. 315 - 334
Hauptverfasser: Duque-Grisales, Eduard, Aguilera-Caracuel, Javier
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Dordrecht Springer 01.01.2021
Springer Netherlands
Springer Nature B.V
Schlagworte:
Business and Management
Business Ethics
Corporate governance
Correlation analysis
Diversification
Education
Emerging markets
Environmental governance
Environmental management
Environmental social & governance
Ethics
Financial performance
Governance
Hypotheses
International finance
Legitimacy
Management
Markets
Multinational corporations
Organizational effectiveness
Original Paper
Panel data
Philosophy
Quality of Life Research
Reputations
Social responsibility
Brazil
Colombia
Mexico
Chile
Peru
M14
Geographic international diversification
ESG performance
Financial performance
Environmental, social and governance dimensions
Emerging market multinationals
Multilatinas
F23
ESG score
Financial slack
ISSN:0167-4544, 1573-0697
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Zusammenfassung:This paper examines whether a firm's financial performance (FP) is associated with superior environmental, social and governance (ESG) scores in emerging markets of multinationals in Latin America. The study addresses the current research gap on this issue; it develops hypotheses and tests them by applying linear regressions with a data panel drawn from the Thomson Reuters Eikon™ database to analyse data on 104 multinationals from Brazil, Chile, Colombia, Mexico and Peru between 2011 and 2015. The results suggest that the relationship between the ESG score and FP is significantly statistically negative. Furthermore, in examining environmental, social and governance separately to accurately determine each variable's relationship to multilatinas' FP, the results reveal a negative relationship. Finally, the empirical analysis provides evidence for a moderating effect of financial slack and geographic international diversification on the relationship between ESG dimensions and firms' FP. This study furthers understanding of the relationship between ESG dimensions and FP for the Latin American business context.
Bibliographie:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 14
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-019-04177-w