Financial determinants of environmental, social and governance performance: Empirical evidence from India

Author:

Joshi Bhavya1ORCID,Joshi Himanshu2ORCID

Affiliation:

1. FPM Scholar-Finance, FORE School of Management, India

2. Professor-Finance, FORE School of Management, India

Abstract

The present study aims to examine the firm-level financial determinants of ESG performance. It elucidates what financial resources it takes to enable the integration of ESG practices and improve a firm’s ESG scores, based on a sample of 94 Indian firms listed on the National Stock Exchange of India between 2015 and 2020. Econometrically, the study employs fixed effects and random effects panel data models as an appropriate methodology. The findings show that firm size, asset intangibility, analyst coverage, and operating cash flow influence firms’ ESG scores positively, whereas leveraging and strategic holding impact them negatively. In addition to the mentioned variables, cash holdings positively influence firms’ environmental, social, and governance scores. While dividend yield does not contribute to combined ESG and governance scores, it has a positive impact on a firm’s environmental and social scores. This is the first study examining the determinants of firm-level ESG performance in an emerging market. Results endorse the interaction of legitimacy theory and slack resource theory in determining a firm’s ESG performance. AcknowledgementThe infrastructural support provided by FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged.

Publisher

LLC CPC Business Perspectives

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. ESG factors in M&A in India: Performance and market insights from 2010 to 2023;Investment Management and Financial Innovations;2024-05-28

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