American Corporate Sustainability and Extra-Financial Performance: Is There an Inverted-U Relationship-Reference-Cited by-同舟云学术

American Corporate Sustainability and Extra-Financial Performance: Is There an Inverted-U Relationship

Published:2023-10-06 Issue:10 Volume:16 Page:435
ISSN:1911-8074
Container-title:Journal of Risk and Financial Management
language:en
Short-container-title:JRFM

Author:

Zghidi Nahed¹,Bousnina Rihab²^ORCID,Mokni Samarkand²

Affiliation:

1. Commercial High School of Sfax, University of Sfax, Airport Road Km 4.5, BP 1081, Sfax 3018, Tunisia

2. Faculty of Economics and Management of Sfax, University of Sfax, Airport Road Km 4, BP 1088, Sfax 3018, Tunisia

Abstract

In this paper, we explore the nexus between extra-financial performance (sustainable ESG) and firm performance within a sample of American firms from different vital sectors. In particular, we examine whether extra-financial performance has an effect on company performance. To this end, we have used a non-linear model. The study is based on a sample of 93 American companies over the period 2010–2019. We find that the association between extra-financial performance and firms’ financial performance is nonlinear, exhibiting an inverted U-shaped pattern. In particular, the results emphasize the importance of caution when pursuing ESG initiatives. Enterprise managers should monitor the effect of ESG activities on extra-financial performance and confirm the ESG threshold of their organization.

Publisher

MDPI AG

Subject

Finance,Economics and Econometrics,Accounting,Business, Management and Accounting (miscellaneous)

Link

https://www.mdpi.com/1911-8074/16/10/435/pdf

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