The impact of ESG performance on firm value
A comparative study of EU markets from a country and sector perspective
Bibliographic Data
| ID | 21391022 |
|---|---|
| Authors | Artur Robert Sajnóg (0000-0001-9475-8848, University of Lodz), Adrian Gawęda (0000-0002-3663-7076, University of Lodz) |
| Year | 2025 |
| Volume | 87 |
| Issue | 4 |
| Pages | 195-217 |
| Publication date | 2025-12-22 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Ruch Prawniczy Ekonomiczny i Socjologiczny (JOURNAL) |
| Journal identifiers | ISSN: 0035-9629 • E-ISSN: 2543-9170 |
| Publisher | Adam Mickiewicz University Poznan (PUBLISHER) |
| DOI | 10.14746/rpeis.2025.87.4.11 |
| OpenAlex | W7116725135 |
| Language | EN |
| References cited | 64 |
The study aims to assess the impact of the ESG (Environmental, Social, and Governance) score of the company on its market value. The research focuses on stock companies of financial markets of European Union (EU) Member States for the years 2011–2021. The ESG discourse on the EU regulated markets was examined across nine economic sectors, in line with LSEG terminology. To test the relationship between ESG performance and firm value, the modified Ohlson Valuation Model (OVM) was utilized. Tobin’s Q was considered as the proxy of firm value, RoA as the proxy of the company’s financial performance, and ESG scoring as the proxy of ESG information that is relevant in assessing the market value. Seven control variables for firm characteristics were also included. To account for potential institutional bias, grounded in legitimacy and institutional theories, we employed two dummy variables – COUNTRY and SECTOR. The findings confirmed our research hypothesis that there is a statistically significant relationship between ESG score and firm value. In line with stakeholder theory, the results support the notion that companies with high ESG scores achieve higher firm value than those with low ESG scores, thus shedding more light on the growing importance of ESG factors for the performance of European companies. The study offers new insights into relationship between ESG performance and firm market value, examined from both from country and sectoral perspectives
Corporate governance · European union · Legitimacy · Market value · Proxy (statistics) · Stock (firearms) · Stock exchange · Stock market · Valuation (finance) · Corporate Social Responsibility Reporting · Environmental Sustainability in Business · Sustainable Finance and Green Bonds
Analysis of Panel Data
Value Maximization, Stakeholder Theory, and the Corporate Objective Function
The Regulatory Dynamics of Sustainable Finance
Circular economy as assistance for sustainable development in OECD countries
Influence of the size of equity on corporate efficiency
Reputation stability vs anti-crisis sustainability
Impact of the global green factor on the capitalization of oil companies in Russia
Corporate Social and Financial Performance
Organizational Legitimacy
The Iron Cage Revisited
| Highly cited | No |
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