Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms
Market turmoil caused by COVID-19 has weakened firms’ financial performance, highlighting the prominence of sustainable business practices by incorporating Environmental, Social, and Governance performance and their disclosure. Though past studies investigated COVID-19’s impact on firm performance,...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
LLC "CPC "Business Perspectives"
2024-07-01
|
| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/20440/IMFI_2024_03_Frank.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832546393546293248 |
|---|---|
| author | G. Vidya Bai Daniel Frank K. Sudhir Prabhu |
| author_facet | G. Vidya Bai Daniel Frank K. Sudhir Prabhu |
| author_sort | G. Vidya Bai |
| collection | DOAJ |
| description | Market turmoil caused by COVID-19 has weakened firms’ financial performance, highlighting the prominence of sustainable business practices by incorporating Environmental, Social, and Governance performance and their disclosure. Though past studies investigated COVID-19’s impact on firm performance, there is consensus on the role of firms’ Environmental, Social, and Governance disclosures between firm performance and the pandemic. With this view, the study aims to examine the impact of COVID-19 on firms’ financial performance with the moderating role of Environmental, Social, and Governance performance disclosure. To do so, the study retrieved data of Nifty 500 index companies from the Bloomberg database for a sample period ranging from 2016 to 2022. To this end, the study performed the fixed-effect regression and GMM model. The findings reveal a significant negative impact of the pandemic on Return on Assets (β =-4.812), Return on Equity (β =–.675), and Earnings Per Share (β = –2.875), highlighting the unfavorable effect of the pandemic on firm performance. Further results showed that firms’ Environmental, Social, and Governance performance disclosure positively moderates the connection between COVID-19 and Return on Assets (β = 3.231), Return on Equity (β = 0.032), and Earnings Per Share (β = 1.523), respectively. This indicates that companies actively involved in Environmental, Social, and Governance disclosure are less likely to suffer during the pandemic in terms of financial performance due to their ESG disclosures. |
| format | Article |
| id | doaj-art-472f927e92774b7ba99bc5388d290670 |
| institution | Kabale University |
| issn | 1810-4967 1812-9358 |
| language | English |
| publishDate | 2024-07-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj-art-472f927e92774b7ba99bc5388d2906702025-02-03T07:09:13ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582024-07-01213748310.21511/imfi.21(3).2024.0720440Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firmsG. Vidya Bai0https://orcid.org/0000-0001-8785-0152Daniel Frank1https://orcid.org/0000-0002-2109-2675K. Sudhir Prabhu2https://orcid.org/0009-0008-1338-7626Ph.D., Associate Professor, Department of Commerce, Manipal Academy of Higher Education, IndiaPh.D., Assistant Professor, Department of Commerce, Manipal Academy of Higher Education, IndiaCA, Chartered Accountant, DTS Associates, IndiaMarket turmoil caused by COVID-19 has weakened firms’ financial performance, highlighting the prominence of sustainable business practices by incorporating Environmental, Social, and Governance performance and their disclosure. Though past studies investigated COVID-19’s impact on firm performance, there is consensus on the role of firms’ Environmental, Social, and Governance disclosures between firm performance and the pandemic. With this view, the study aims to examine the impact of COVID-19 on firms’ financial performance with the moderating role of Environmental, Social, and Governance performance disclosure. To do so, the study retrieved data of Nifty 500 index companies from the Bloomberg database for a sample period ranging from 2016 to 2022. To this end, the study performed the fixed-effect regression and GMM model. The findings reveal a significant negative impact of the pandemic on Return on Assets (β =-4.812), Return on Equity (β =–.675), and Earnings Per Share (β = –2.875), highlighting the unfavorable effect of the pandemic on firm performance. Further results showed that firms’ Environmental, Social, and Governance performance disclosure positively moderates the connection between COVID-19 and Return on Assets (β = 3.231), Return on Equity (β = 0.032), and Earnings Per Share (β = 1.523), respectively. This indicates that companies actively involved in Environmental, Social, and Governance disclosure are less likely to suffer during the pandemic in terms of financial performance due to their ESG disclosures.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/20440/IMFI_2024_03_Frank.pdfand Governance performanceCOVID-19Environmentalfinancial performanceIndiaNifty 500 |
| spellingShingle | G. Vidya Bai Daniel Frank K. Sudhir Prabhu Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms Investment Management & Financial Innovations and Governance performance COVID-19 Environmental financial performance India Nifty 500 |
| title | Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms |
| title_full | Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms |
| title_fullStr | Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms |
| title_full_unstemmed | Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms |
| title_short | Does ESG disclosure enhance firm performance during COVID-19? Evidence from Nifty 500 firms |
| title_sort | does esg disclosure enhance firm performance during covid 19 evidence from nifty 500 firms |
| topic | and Governance performance COVID-19 Environmental financial performance India Nifty 500 |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/20440/IMFI_2024_03_Frank.pdf |
| work_keys_str_mv | AT gvidyabai doesesgdisclosureenhancefirmperformanceduringcovid19evidencefromnifty500firms AT danielfrank doesesgdisclosureenhancefirmperformanceduringcovid19evidencefromnifty500firms AT ksudhirprabhu doesesgdisclosureenhancefirmperformanceduringcovid19evidencefromnifty500firms |