Title: ESG dimensions, firm performance and corporate governance systems

Authors: Zied Ftiti; Maher Jeriji; Waël Louhichi; Yasmine Mensi; Amel Zenaidi

Addresses: EDC Paris Business School, EDC PBS, 74/80 Roque de Fillol, Puteaux 92807 Cedex, France ' IHEC, University of Carthage, Rue Victor Hugo, Carthage Présidence, 2016, Tunisia ' ESSCA School of Management, 55 Quai Alphonse Le Gallo, 92100 Boulogne Billancourt, France ' IHEC, University of Carthage, Rue Victor Hugo, Carthage Présidence, 2016, Tunisia ' IHEC, University of Carthage, Rue Victor Hugo, Carthage Présidence, 2016, Tunisia

Abstract: This study aims to investigate the ambiguous relationship between corporate sustainable practices [in the environmental, social and governance (ESG) dimensions] and their financial performance in four countries (the USA, Germany, Italy, and Japan) with different national corporate governance systems (Anglo-Saxon, Germanic, Latin, and Japanese) over the period 2010-2018. We analyse the impact of the global ESG score and disaggregated ESG scores on firm performance with both accounting and market measures. Using a panel generalised method of moments system model, we show the existence of a positive relationship between ESG performance and corporate financial performance only for countries representing the Germanic and Latin governance systems, and this is mainly explained by the significant effect of the governance pillar.

Keywords: environmental; social and governance; ESG performance; corporate financial performance; CFP; market value; national governance systems.

DOI: 10.1504/IJBGE.2024.139684

International Journal of Business Governance and Ethics, 2024 Vol.18 No.4/5, pp.492 - 521

Received: 01 Sep 2022
Accepted: 19 Dec 2022
Published online: 05 Jul 2024 *

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