The Impact of ESG Participation on Firm Innovation

Empirical Findings from International Data

Bibliographic Data

ID16912510
AuthorsJaeho Lee (0000-0002-2735-0647, Kyung Hee University), Jungwook Kim (0009-0000-8518-2138, University of Cincinnati), Jaemin Cho (0000-0001-8838-9345, University of Ulsan, corresponding author)
Year2024
Volume14
Issue2
Publication date2024-04-01
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/21582440241253424
OpenAlexW4399108669
LanguageEN
Citations received2
References cited59

This paper is to explore the association between environmental, social, and governance (ESG) dimensions and corporate innovative activities. Given that existing literature in the relationship between ESG and firm performance to date offers no clearly consistent empirical results and large-scale sample studies based on global companies remain scarce, this paper aims to offer a fresh and noteworthy insight about relationship between the ESG and innovation in recent times when ESG has been considered as important tenets of management because of the ESG’s enormous significance for corporate solid performance and sound development of capital markets. To test the hypotheses derived from the theoretical reasoning, this paper selected ESG indicators and financial data of global companies from 1999 to 2009 based on the relationship between ESG activities and corporate innovation, and the effects on corporate innovative product development performance are analyzed according to detailed ESG activities by logistic regression analysis. The study found that positive environmental and social activities appear to enhance innovation outputs by firms in various industries. These results indicate that the firms challenged by environmental issues respond with assertive innovative activities and the firms’ efforts to stimulate certain types of social activities are reflected in a higher level of innovation. Supporting the complex relationship between ESG activities and corporate innovation performance, the findings will help firms’ decision-makers, stakeholders, as well as academics, to improve their awareness of the impact of ESG activities on the innovation performance of the firm, both as a comprehensive factor and individually by pillar

Business · Empirical research · Industrial organization · Corporate Social Responsibility Reporting · Environmental Sustainability in Business · Sustainable Finance and Green Bonds · Accounting

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