Unveiling the Relationship Between ESG and Growth of Unlisted Firms: Empirical Insights From Eastern Europe and Central Asia

IF 12.5 1区管理学 Q1 BUSINESS

Business Strategy and The Environment Pub Date : 2025-03-28 DOI:10.1002/bse.4257

Nosheen Rasool, Murugesh Arunachalam, Nirosha Hewa Wellalage, Vijay Kumar

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Abstract

This study aims to uncover the empirical relationship between environmental, social and governance (ESG) factors and the growth of 19,956 unlisted firms in the East Europe and Central Asia (EECA) region. While the existing literature focuses on ESG performance in listed firms, there is a gap in understanding the growth dynamics of unlisted firms in EECA, which face challenges in implementing ESG initiatives due to resource constraints as the prime cause. The ESG index is constructed using principal component analysis (PCA), and growth is assessed through the variables of sales growth (SG), employment growth (EG) and asset growth (AG). To address endogeneity in the ESG–growth relationship, a two‐stage least squares (2SLS) estimator is employed, using instrumental variables. The results show a positive and significant relationship between ESG and growth indicators, emphasising the importance of sustainable practices for positive stakeholder relationships, enhanced reputation and long‐term growth. This research offers unique insights into the ESG–growth connection for unlisted firms in EECA, benefiting stakeholders by divulging employment opportunities in society and amplifying sales and asset growth.

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揭示ESG与非上市公司成长的关系：来自东欧和中亚的实证洞察

本研究旨在揭示环境、社会和治理（ESG）因素与东欧和中亚（EECA）地区19,956家非上市公司增长之间的实证关系。虽然现有文献关注的是上市公司的ESG绩效，但在理解EECA非上市公司的增长动态方面存在差距，由于资源限制是主要原因，这些公司在实施ESG举措方面面临挑战。ESG指数采用主成分分析（PCA）构建，并通过销售增长（SG）、就业增长（EG）和资产增长（AG）等变量来评估增长。为了解决esg -增长关系中的内生性问题，使用工具变量采用了两阶段最小二乘（2SLS）估计器。结果显示，ESG与增长指标之间存在显著的正相关关系，强调了可持续实践对积极的利益相关者关系、提高声誉和长期增长的重要性。本研究对EECA非上市公司的esg增长联系提供了独特的见解，通过披露社会就业机会和放大销售和资产增长，使利益相关者受益。

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来源期刊

Business Strategy and The Environment Multiple-

CiteScore

22.50

自引率

19.40%

发文量

336

期刊介绍： Business Strategy and the Environment (BSE) is a leading academic journal focused on business strategies for improving the natural environment. It publishes peer-reviewed research on various topics such as systems and standards, environmental performance, disclosure, eco-innovation, corporate environmental management tools, organizations and management, supply chains, circular economy, governance, green finance, industry sectors, and responses to climate change and other contemporary environmental issues. The journal aims to provide original contributions that enhance the understanding of sustainability in business. Its target audience includes academics, practitioners, business managers, and consultants. However, BSE does not accept papers on corporate social responsibility (CSR), as this topic is covered by its sibling journal Corporate Social Responsibility and Environmental Management. The journal is indexed in several databases and collections such as ABI/INFORM Collection, Agricultural & Environmental Science Database, BIOBASE, Emerald Management Reviews, GeoArchive, Environment Index, GEOBASE, INSPEC, Technology Collection, and Web of Science.