SDG adoption and firm risk: The impact of ESG performance, investor confidence, and agency cost

IF 5.6 2区经济学 Q1 BUSINESS, FINANCE

International Review of Economics & Finance Pub Date : 2025-05-31 DOI:10.1016/j.iref.2025.104205

Rajat Sharma , Sonia Chawla , Vishal Dagar , Muneza Kagzi , Amar Rao

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引用次数: 0

Abstract

This study investigates the nexus between firm-level Sustainable Development Goals (SDG) adoption and firm risk using a unique dataset of National Stock Exchange (NSE) 500 companies from 2019 to 2024. It constructs a novel SDG adoption index to assess this relationship and reveals a noteworthy reduction in firm risk associated with SDG adoption. The results remain robust after a battery of robustness checks, including endogeneity concerns using 2SLS IV and system GMM and sample selection bias through Heckman's two-stage methods. Furthermore, the mechanism test indicates that SDG adoption reduces firm risk by enhancing investor confidence, improving ESG performance, and reducing agency costs. In addition, heterogeneity analyses demonstrate that the impact is more accentuated for enterprises with higher information asymmetry, higher board gender diversity, and non-state ownership. The results carry significant implications for investors, corporations, and policymakers seeking to mitigate risk and foster sustainable practices, particularly within the context of the COVID-19 pandemic and emerging markets.

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可持续发展目标采用与企业风险：ESG绩效、投资者信心和代理成本的影响

本研究利用2019年至2024年全国证券交易所（NSE） 500强公司的独特数据集，调查了企业层面可持续发展目标（SDG）的采用与企业风险之间的关系。它构建了一个新的可持续发展目标采用指数来评估这种关系，并揭示了与可持续发展目标采用相关的企业风险的显著降低。经过一系列稳健性检查，包括使用2SLS IV和系统GMM的内生性问题以及通过Heckman的两阶段方法的样本选择偏差，结果仍然是稳健性的。此外，机制检验表明，采用可持续发展目标可以通过增强投资者信心、提高ESG绩效和降低代理成本来降低企业风险。此外，异质性分析表明，信息不对称程度高、董事会性别多样性程度高、非国有企业的影响更大。研究结果对寻求降低风险和促进可持续实践的投资者、企业和政策制定者具有重要意义，特别是在2019冠状病毒病大流行和新兴市场的背景下。

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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来源期刊

International Review of Economics & Finance Multiple-

CiteScore

7.30

自引率

2.20%

发文量

253

期刊介绍： The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.