Corporate ESG decoupling and R&D investment

IF 3.8 3区经济学 Q1 BUSINESS, FINANCE

North American Journal of Economics and Finance Pub Date : 2024-08-23 DOI:10.1016/j.najef.2024.102278

Yicheng Sun , Qizhi Tao , Du Wang , Wan Zhang

{"title":"Corporate ESG decoupling and R&D investment","authors":"Yicheng Sun , Qizhi Tao , Du Wang , Wan Zhang","doi":"10.1016/j.najef.2024.102278","DOIUrl":null,"url":null,"abstract":"<div><p>This study investigates whether and how firms’ engagement in ESG decoupling leads to changes in R&D investment. Using a sample of U.S. listed firms from 2012 to 2023, we discover a consistent negative effect of ESG decoupling on R&D investment, indicating opposite effects from ESG brown-washing versus green-washing. Brown-washing firms exhibit a significant increase in R&D investment. Cross-sectional tests support the strategic incentive that a more pronounced positive effect observed in smaller firms, firms facing greater financial constraints and market competition, and among high-tech firms. In contrast, we find that green-washing firms experience a significant decrease in R&D investment. The decrease in R&D investment among green-washing firms is mitigated by more stringent corporate governance enforced by institutional investors, but is further amplified among firms facing greater market competition and high-tech firms, suggesting that green-washing firms with decreased R&D investment are subject to managerial opportunism. Our findings remain robust to different subsets of benchmarking normal firms and alternative measurement. In addition, we find that the capital market responds positively to ESG green-washing and negatively towards brown-washing, which implies a favorable attitude toward floated ESG disclosure from the investors. Overall, our study unveils the important role of ESG decoupling in reshaping corporate investment decision and contribute to the growing literature on ESG decoupling.</p></div>","PeriodicalId":47831,"journal":{"name":"North American Journal of Economics and Finance","volume":"75 ","pages":"Article 102278"},"PeriodicalIF":3.8000,"publicationDate":"2024-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"North American Journal of Economics and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1062940824002031","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

This study investigates whether and how firms’ engagement in ESG decoupling leads to changes in R&D investment. Using a sample of U.S. listed firms from 2012 to 2023, we discover a consistent negative effect of ESG decoupling on R&D investment, indicating opposite effects from ESG brown-washing versus green-washing. Brown-washing firms exhibit a significant increase in R&D investment. Cross-sectional tests support the strategic incentive that a more pronounced positive effect observed in smaller firms, firms facing greater financial constraints and market competition, and among high-tech firms. In contrast, we find that green-washing firms experience a significant decrease in R&D investment. The decrease in R&D investment among green-washing firms is mitigated by more stringent corporate governance enforced by institutional investors, but is further amplified among firms facing greater market competition and high-tech firms, suggesting that green-washing firms with decreased R&D investment are subject to managerial opportunism. Our findings remain robust to different subsets of benchmarking normal firms and alternative measurement. In addition, we find that the capital market responds positively to ESG green-washing and negatively towards brown-washing, which implies a favorable attitude toward floated ESG disclosure from the investors. Overall, our study unveils the important role of ESG decoupling in reshaping corporate investment decision and contribute to the growing literature on ESG decoupling.

查看原文本刊更多论文

企业环境、社会和公司治理脱钩与研发投资

本研究探讨了企业参与 ESG 脱钩是否以及如何导致研发投资的变化。利用 2012 年至 2023 年的美国上市公司样本，我们发现 ESG 脱钩对 R&D 投资产生了一致的负面影响，表明 ESG 洗褐与洗绿产生了相反的效果。洗绿公司的研发投资大幅增加。横截面测试支持战略激励，即在规模较小的企业、面临较大财务限制和市场竞争的企业以及高科技企业中观察到更明显的积极影响。与此相反，我们发现 "绿色清洗 "企业的研发投资显著减少。机构投资者实施的更严格的公司治理缓解了绿色清洗企业研发投资的减少，但在面临更大市场竞争的企业和高科技企业中，研发投资的减少被进一步放大，这表明研发投资减少的绿色清洗企业受到了管理机会主义的影响。我们的研究结果对于不同的正常基准企业子集和其他衡量方法仍然是稳健的。此外，我们还发现，资本市场对 ESG "洗绿 "行为的反应是积极的，而对 "洗褐 "行为的反应是消极的。总之，我们的研究揭示了环境、社会和公司治理脱钩在重塑企业投资决策中的重要作用，为环境、社会和公司治理脱钩方面日益增多的文献做出了贡献。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

North American Journal of Economics and Finance Multiple-

CiteScore

7.30

自引率

8.30%

发文量

168

期刊介绍： The focus of the North-American Journal of Economics and Finance is on the economics of integration of goods, services, financial markets, at both regional and global levels with the role of economic policy in that process playing an important role. Both theoretical and empirical papers are welcome. Empirical and policy-related papers that rely on data and the experiences of countries outside North America are also welcome. Papers should offer concrete lessons about the ongoing process of globalization, or policy implications about how governments, domestic or international institutions, can improve the coordination of their activities. Empirical analysis should be capable of replication. Authors of accepted papers will be encouraged to supply data and computer programs.