Firms' sustainability, financial performance, and regulatory dynamics: Evidence from European firms

Agoraki, Maria-Eleni K., Giaka, Maria, Konstantios, Dimitrios and Patsika, Victoria ORCID: https://orcid.org/0000-0002-5763-2020 2023. Firms' sustainability, financial performance, and regulatory dynamics: Evidence from European firms. Journal of International Money and Finance 131 , 102785. 10.1016/j.jimonfin.2022.102785

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Abstract

This study examines the association between firms’ ESG reputational risk and financial performance under the EU regulatory policy changes and the COVID-19 period. Analyzing a panel of 1,816 European listed firms during the period 2007-2021, we document evidence that firms with lower ESG reputational risk have reduced information asymmetry, are less financial constrained and perform better. To establish causality, we design a quasi-natural experiment focusing on the 2014/95/EU directive of non-financial disclosing and the COVID-19 exogenous shock. Our findings are robust to several estimation techniques that address endogeneity, self-selection, and model sensitivity.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	0261-5606
Date of First Compliant Deposit:	9 December 2022
Date of Acceptance:	29 November 2022
Last Modified:	06 Jan 2024 04:31
URI:	https://orca.cardiff.ac.uk/id/eprint/154741

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