What is it about?
This study examines the impact of environmental, social, and governance (ESG) reputational risk on a sample of listed firms’ market longevity.
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Why is it important?
Using a novel panel dataset consisting of US firms over the period 2007–2019, we perform dynamic empirical analysis to quantify the underlying relationships between firms’ ESG reputational risk and market longevity. We argue that ESG reputational risk has a negative impact on firm growth opportunities, mitigating thus market longevity.
Perspectives
This study undertakes an exploration into how environmental, social, and governance (ESG) reputational risk affects the enduring presence of listed firms in the market. Through an innovative analysis of a dynamic dataset encompassing US firms from 2007 to 2019, we uncover the nuanced interplay between a company's ESG reputational risk and its market longevity. Our research posits that heightened ESG reputational risk tends to curtail a firm's growth opportunities, thereby impacting its sustained market presence. Importantly, these empirical insights endure rigorous testing, offering crucial perspectives for managers, stakeholders, and market participants. These findings serve as a guiding beacon, illuminating the need for proactive management of ESG risks to fortify a firm's enduring foothold in the market landscape.
Dr. Dimitrios Konstantios
Alba Graduate Business School, The American College of Greece
Read the Original
This page is a summary of: Firms’ ESG reputational risk and market longevity: A firm-level analysis for the United States, Journal of Business Research, October 2022, Elsevier,
DOI: 10.1016/j.jbusres.2022.05.010.
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