Work

Does ESG reputational risk affect the efficiency and speed of adjustment of corporate investment?

Year: 2023

Type: article

Abstract: This study explores the relationship between environmental, social, and governance (ESG) reputational risk and investment efficiency. We provide evidence that ESG reputational risk relates to higher corporate suboptimal investment (underinvestment) and a lower speed of adjustment back to the optimal investment level. Our findings hold for parametric and nonparametric estimations of underinvestment and are robust to several techniques that address endogeneity and self‐selection. Overall, our study highlights the important role of ESG reputational risk in determining corporate investment efficiency.

Source: European Financial Management

DOI: 10.1111/eufm.12470

Authors: Ioannis Chasiotis, Dimitrios Gounopoulos, Dimitrios Konstantios, Vasilios‐Christos Naoum, Victoria Patsika

Institutions: Agricultural University of Athens, The American College of Greece, University of Bath, Alba Graduate Business School, The American College of Greece, University of Piraeus, University of Macedonia

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,040

OpenAlex ID: W4388961542

FWCI: 6.216

Cites: 88

Cited by: 43

Related to: 10