A0403
Title: Assessing nonlinear impact of ESG on company performance
Authors: Yufeng Mao - University of Padova (Italy) [presenting]
Abstract: The prevalent linear models employed to gauge the influence of ESG criteria are assessed on corporate performance within the existing literature. The effects of ESG factors are examined on both accounting-based and market-based profitability proxies. The nonlinear effect is first examined by incorporating a quadratic ESG score term into a fixed effects panel data model. This is followed by an analysis of asymmetric influences, distinguishing between the effects of positive and negative ESG score fluctuations. Lastly, a quantile fixed effects model is implemented to account for potential variability in ESG impact across different quantiles of corporate performance metrics. The findings reveal that ESG scores exhibit increasing marginal effects. Additionally, asymmetrical impacts of positive versus negative ESG score changes are uncovered. Results from quantile regression suggest that ESG scores' influence on a market-based profitability proxy is not uniform across quantiles.
