Does ESG reputational risk affect the efficiency and speed of adjustment of corporate investment?-Reference-Cited by-同舟云学术

Does ESG reputational risk affect the efficiency and speed of adjustment of corporate investment?

Published:2023-11-22 Issue: Volume: Page:
ISSN:1354-7798
Container-title:European Financial Management
language:en
Short-container-title:Euro Fin Management

Author:

Chasiotis Ioannis¹²^ORCID,Gounopoulos Dimitrios³^ORCID,Konstantios Dimitrios⁴^ORCID,Naoum Vasilios‐Christos⁵,Patsika Victoria⁶

Affiliation:

1. Department of Agribusiness and Supply Chain Management Agricultural University of Athens Theves Greece

2. The American College of Greece School of Business and Economics Athens Greece

3. School of Management University of Bath Bath UK

4. ALBA Graduate Business School The American College of Greece Athens Greece

5. Department of Maritime Studies University of Piraeus Piraeus Greece

6. Department of Accounting and Finance University of Macedonia Thessaloniki Greece

Abstract

AbstractThis study explores the relationship between environmental, social, and governance (ESG) reputational risk and investment efficiency. We provide evidence that ESG reputational risk relates to higher corporate suboptimal investment (underinvestment) and a lower speed of adjustment back to the optimal investment level. Our findings hold for parametric and nonparametric estimations of underinvestment and are robust to several techniques that address endogeneity and self‐selection. Overall, our study highlights the important role of ESG reputational risk in determining corporate investment efficiency.

Publisher

Wiley

Subject

General Economics, Econometrics and Finance,Accounting

Link

https://onlinelibrary.wiley.com/doi/pdf/10.1111/eufm.12470

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