Effect of Accounting and ESG Controversies on Financial Performance: Moderating Effect of ESG
Year: 2025
Type: article
Abstract: This study unveils the crucial impact of ESG (Environmental, Social and Governance) performance on controversies and the firm performance nexus for companies listed in S&P1500. We measure firm performance regarding market-based (Tobin’s Q) and profitability-based (ROA) performance, while controversies are gauged by accounting and ESG-related issues. To achieve the highest level of accuracy, we employ the System Generalized Method of Moments (GMM) estimation to address for endogeneity. The key findings reveal a positive interaction effect between lagged ESG and controversies about market-based performance. However, lagged ESG does not significantly impact profitability-based performance measures in the context of controversies.
Source: Fiscaoeconomia
Author: Kemal Çek
Institution: Cyprus International University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4410720325