An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation
Introduction: Environmental, social, and governance (ESG) considerations have become increasingly important in the financial market and serve as concrete manifestations of sustainable development within a sector. Most corporate leaders have adopted ESG concerns as an important strategy to enhance th...
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2023-08-01
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| Series: | Frontiers in Environmental Science |
| Subjects: | |
| Online Access: | https://www.frontiersin.org/articles/10.3389/fenvs.2023.1256052/full |
| _version_ | 1797745807119613952 |
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| author | Tao Fu Jiangjun Li |
| author_facet | Tao Fu Jiangjun Li |
| author_sort | Tao Fu |
| collection | DOAJ |
| description | Introduction: Environmental, social, and governance (ESG) considerations have become increasingly important in the financial market and serve as concrete manifestations of sustainable development within a sector. Most corporate leaders have adopted ESG concerns as an important strategy to enhance their financial performance. Therefore, this study investigated whether ESG affects corporate financial performance, and if this relationship is moderated by digital transformation.Method: We used A-share listed companies in China from 2015 to 2021 as samples to test this mechanism.Results: Regression analysis showed that ESG positively and significantly affects corporate financial performance, and digital transformation drives this promoting effect. Furthermore, we found that the positive effect of current ESG on financial performance in the lag period will gradually weaken. Specifically, the heterogeneity test results show that the enhancement effect of ESG on financial performance is significant for non-state-owned companies but insignificant for state-owned companies; the same is true for companies located in the eastern region compared with those in the midwestern region. Finally, the enhancement effect of ESG on the financial performance of polluting firms is stronger than that on non-polluting firms.Conclusion: These findings will be useful for firms and government departments in formulating relevant policies. |
| first_indexed | 2024-03-12T15:28:15Z |
| format | Article |
| id | doaj.art-0f88324656634f36b3c8cab820ac3975 |
| institution | Directory Open Access Journal |
| issn | 2296-665X |
| language | English |
| last_indexed | 2024-03-12T15:28:15Z |
| publishDate | 2023-08-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Environmental Science |
| spelling | doaj.art-0f88324656634f36b3c8cab820ac39752023-08-10T09:30:37ZengFrontiers Media S.A.Frontiers in Environmental Science2296-665X2023-08-011110.3389/fenvs.2023.12560521256052An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformationTao FuJiangjun LiIntroduction: Environmental, social, and governance (ESG) considerations have become increasingly important in the financial market and serve as concrete manifestations of sustainable development within a sector. Most corporate leaders have adopted ESG concerns as an important strategy to enhance their financial performance. Therefore, this study investigated whether ESG affects corporate financial performance, and if this relationship is moderated by digital transformation.Method: We used A-share listed companies in China from 2015 to 2021 as samples to test this mechanism.Results: Regression analysis showed that ESG positively and significantly affects corporate financial performance, and digital transformation drives this promoting effect. Furthermore, we found that the positive effect of current ESG on financial performance in the lag period will gradually weaken. Specifically, the heterogeneity test results show that the enhancement effect of ESG on financial performance is significant for non-state-owned companies but insignificant for state-owned companies; the same is true for companies located in the eastern region compared with those in the midwestern region. Finally, the enhancement effect of ESG on the financial performance of polluting firms is stronger than that on non-polluting firms.Conclusion: These findings will be useful for firms and government departments in formulating relevant policies.https://www.frontiersin.org/articles/10.3389/fenvs.2023.1256052/fullESGfirm performancedigital transformationmoderating effectsustainable development |
| spellingShingle | Tao Fu Jiangjun Li An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation Frontiers in Environmental Science ESG firm performance digital transformation moderating effect sustainable development |
| title | An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation |
| title_full | An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation |
| title_fullStr | An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation |
| title_full_unstemmed | An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation |
| title_short | An empirical analysis of the impact of ESG on financial performance: the moderating role of digital transformation |
| title_sort | empirical analysis of the impact of esg on financial performance the moderating role of digital transformation |
| topic | ESG firm performance digital transformation moderating effect sustainable development |
| url | https://www.frontiersin.org/articles/10.3389/fenvs.2023.1256052/full |
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