Environmental, social, and governance, firm performance and the moderating role of power distance cultural value during the COVID‐19 pandemic

Abstract

AbstractWe examine the association between environmental, social, and governance (ESG) and firm performance, taking into account the influence of power distance (PD) cultural orientation among 38 leading technology‐driven global companies between 2017 and 2021. First, we establish an internal network structure through a chance‐constrained network data envelopment analysis (NDEA) model to analyze the R&D investment and eco‐business efficiencies of our sample companies. Among the average DEA score results, eco‐business efficiencies performed better with after COVID‐19 than R&D investment performance. Second, we conduct a truncated regression analysis and find that PD positively (negatively) moderates the impact of social (environmental and governance) factors on R&D investment efficiency (eco‐business efficiency). Overall, we highlight strategic ESG toward their sustainability business success and underline the specific NDEA application in assessing the efficiencies of innovative industries.