Entrepreneurial finance and sustainability: Do institutional investors impact the ESG performance of SMEs?

Q1 Business, Management and Accounting

Journal of Business Venturing Insights Pub Date : 2024-11-01 DOI:10.1016/j.jbvi.2024.e00498

Wolfgang Drobetz , Sadok El Ghoul , Omrane Guedhami , Jan P. Hackmann , Paul P. Momtaz

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Abstract

Institutional investors improve the environmental, social, and governance (ESG) performance of small- and medium-sized enterprises (SMEs). Our difference-in-differences framework shows that the backing from private equity and venture capital funds leads to an increase in SMEs’ externally validated ESG scores compared to their matched non-investor-backed peers. Consistent with “ESG-as-insurance” theory, the ESG performance of SMEs with a higher probability of failure is more likely to benefit from the backing of institutional investors. This positive effect is heterogeneous; while SMEs with high ex-ante ESG performance further improve their ESG performance following institutional investor backing, SMEs with low ex-ante ESG performance are unlikely to implement any improvements. Entrepreneurial finance seems to help sustainable entrepreneurs transform into “sustainability champions,” while neglecting the betterment of non-sustainable SMEs.

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创业融资与可持续发展：机构投资者会影响中小企业在环境、社会和治理方面的表现吗？

机构投资者提高了中小企业的环境、社会和治理（ESG）绩效。我们的差异框架表明，与未获得投资者支持的同行相比，获得私募股权和风险投资基金支持的中小企业经外部验证的环境、社会和治理得分会有所提高。与 "环境、社会和公司治理即保险 "理论一致，失败概率较高的中小企业的环境、社会和公司治理表现更有可能受益于机构投资者的支持。这种积极影响是异质性的；虽然事前环境、社会和公司治理绩效高的中小企业在获得机构投资者支持后会进一步改善其环境、社会和公司治理绩效，但事前环境、社会和公司治理绩效低的中小企业不太可能实施任何改善。创业融资似乎有助于可持续发展的企业家转变为 "可持续发展的倡导者"，但却忽视了非可持续发展的中小企业的改善。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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