Sustainable behaviors and firm performance: The role of financial constraints' alleviation

Financial mechanisms play a vital role in maintaining firm performance alongside sustainable growth practices, which include factors such as low-carbon emissions, green energy, and climate change. External investors increasingly incorporate environmental, social, and governance (ESG) considerations...

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Tác giả chính:	Dongyang Zhang
Đồng tác giả:	Brian Michael Lucey
Định dạng:	Journal Article
Ngôn ngữ:	English
Thông tin xuất bản:	Elsevier B.V. 2022
Chủ đề:	Low-carbon emissions ESG performance score Financial constraints Financial intermediations
Truy cập trực tuyến:	https://digital.lib.ueh.edu.vn/handle/UEH/65320 https://doi.org/10.1016/j.eap.2022.02.003
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spelling	oai:localhost:UEH-653202022-10-27T02:34:11Z Sustainable behaviors and firm performance: The role of financial constraints' alleviation Dongyang Zhang Brian Michael Lucey Low-carbon emissions ESG performance score Financial constraints Financial intermediations Financial mechanisms play a vital role in maintaining firm performance alongside sustainable growth practices, which include factors such as low-carbon emissions, green energy, and climate change. External investors increasingly incorporate environmental, social, and governance (ESG) considerations into their investment decisions. However, there is limited data on the potential mechanisms underlying ESG and how ESG performance relates to firm performance. This paper, therefore, focuses on the relationship between firms’ ESG performance and explores whether firm performance is moderated by ESG-related financial mechanisms. Our empirical analysis is based on data from 215,110 firm-year observations from global, publicly-traded firms during the period 2016–2020. Using ROA and ROS as measures, we found that ESG performance has a significant and positive effect on firm performance. Second, we discovered that ESG performance improves firm performance by alleviating financial constraints. Third, our results show that ESG performance improves external financing, including long-term and short-term debt. Finally, we demonstrate that strong ESG performance sends a high-quality signal to the credit market, which helps firms gain more trade credit, allowing them to improve their performance and the financial environment. 2022-10-27T02:34:11Z 2022-10-27T02:34:11Z 2022 Journal Article 0313-5926 https://digital.lib.ueh.edu.vn/handle/UEH/65320 https://doi.org/10.1016/j.eap.2022.02.003 en Economic Analysis and Policy Vol. 74 none Portable Document Format (PDF) 220 233 Elsevier B.V.
institution	Đại học Kinh tế Thành phố Hồ Chí Minh
collection	DSpaceUEH
language	English
topic	Low-carbon emissions ESG performance score Financial constraints Financial intermediations
spellingShingle	Low-carbon emissions ESG performance score Financial constraints Financial intermediations Dongyang Zhang Sustainable behaviors and firm performance: The role of financial constraints' alleviation
description	Financial mechanisms play a vital role in maintaining firm performance alongside sustainable growth practices, which include factors such as low-carbon emissions, green energy, and climate change. External investors increasingly incorporate environmental, social, and governance (ESG) considerations into their investment decisions. However, there is limited data on the potential mechanisms underlying ESG and how ESG performance relates to firm performance. This paper, therefore, focuses on the relationship between firms’ ESG performance and explores whether firm performance is moderated by ESG-related financial mechanisms. Our empirical analysis is based on data from 215,110 firm-year observations from global, publicly-traded firms during the period 2016–2020. Using ROA and ROS as measures, we found that ESG performance has a significant and positive effect on firm performance. Second, we discovered that ESG performance improves firm performance by alleviating financial constraints. Third, our results show that ESG performance improves external financing, including long-term and short-term debt. Finally, we demonstrate that strong ESG performance sends a high-quality signal to the credit market, which helps firms gain more trade credit, allowing them to improve their performance and the financial environment.
author2	Brian Michael Lucey
author_facet	Brian Michael Lucey Dongyang Zhang
format	Journal Article
author	Dongyang Zhang
author_sort	Dongyang Zhang
title	Sustainable behaviors and firm performance: The role of financial constraints' alleviation
title_short	Sustainable behaviors and firm performance: The role of financial constraints' alleviation
title_full	Sustainable behaviors and firm performance: The role of financial constraints' alleviation
title_fullStr	Sustainable behaviors and firm performance: The role of financial constraints' alleviation
title_full_unstemmed	Sustainable behaviors and firm performance: The role of financial constraints' alleviation
title_sort	sustainable behaviors and firm performance: the role of financial constraints' alleviation
publisher	Elsevier B.V.
publishDate	2022
url	https://digital.lib.ueh.edu.vn/handle/UEH/65320 https://doi.org/10.1016/j.eap.2022.02.003
work_keys_str_mv	AT dongyangzhang sustainablebehaviorsandfirmperformancetheroleoffinancialconstraintsalleviation
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Sustainable behaviors and firm performance: The role of financial constraints' alleviation

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