Investigating the double-edged sword effect of environmental, social and governance practices on corporate risk-taking in the high-tech industry

IF 7.6 1区经济学 Q1 ECONOMICS

Oeconomia Copernicana Pub Date : 2023-06-30 DOI:10.24136/oc.2023.014

Xiaodong Teng, Kun-Shan Wu, Lopin Kuo, Bao-Guang Chang

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引用次数: 0

Abstract

Research background: Corporate risk-taking (CRT) is crucial to a business's survival and performance and is a driving force for sustainable development. Environmental, social and governance (ESG) practices are critical to firm profits when considering sustainable economic growth; however, they can also be the cause of financial burdens. It is, therefore, crucial to assess the relationship between a company's ESG performance and its risk-taking. Purpose of the article: Considering the controversial results of empirical studies on the relationship between ESG and CRT, this study aims to theoretically and empirically investigate the curvilinear nexus between ESG practices and CRT within Taiwan's high-tech industry. Methods: Ordinary least square regression and quantile regression analysis was applied to investigate the curvilinear ESG-CRT relationship. The empirical studies were conducted in 38 high-tech companies on the Taiwan Stock Exchange that disclosed ESG information between 2005 and 2020, with a total of 437 firm-year observations. Findings & value added: Quantile regression estimation results reveal the ESG-CRT nexus is U-shaped (convex). Both the environmental and social pillar's relationship with CRT is nonlinear and U-shaped, whereas the governance pillar has no significant relationship with CRT. Overall, a comprehensive view is provided that shows ESG practices can have a double-edged sword effect on CRT. It is suggested that high-tech companies in Taiwan should avoid ESG practices becoming a tool for managements' self-interest. More information of ESG practices should be disclosed to stakeholders to ensure they are given full credit for the positive impact they have on capital allocation. Regulators guide firms to surpass the threshold of the U-shaped effect and take into consideration the whole benefits of stakeholders when they allocate existing resources toward environmental and social endeavors.

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调查环境、社会和治理实践对高科技行业企业风险承担的双刃剑效应

研究背景：企业风险承担（CRT）对企业的生存和绩效至关重要，是可持续发展的驱动力。在考虑可持续经济增长时，环境、社会和治理（ESG）实践对企业利润至关重要；然而，它们也可能是造成财政负担的原因。因此，评估企业的ESG绩效与其风险决策之间的关系至关重要。本文目的：考虑到ESG与CRT之间关系的实证研究结果存在争议，本研究旨在从理论和实证上研究台湾高科技产业中ESG实践与CRT之间的曲线关系。方法：采用普通最小二乘回归和分位数回归分析研究ESG-CRT曲线关系。实证研究在台湾证券交易所的38家高科技公司中进行，这些公司在2005年至2020年期间披露了ESG信息，共有437个固定年的观察结果。研究结果和附加值：分位数回归估计结果显示ESG-CRT关系为U型（凸）。环境和社会支柱与CRT的关系都是非线性和U型的，而治理支柱与CRT没有显著关系。总体而言，提供了一个全面的观点，表明ESG实践可能对CRT产生双刃剑效应。建议台湾的高科技企业应避免ESG实践成为管理层谋取私利的工具。应向利益相关者披露更多ESG实践的信息，以确保他们对资本分配产生的积极影响得到充分赞扬。监管机构引导企业超越U型效应的阈值，并在将现有资源分配给环境和社会事业时考虑利益相关者的整体利益。

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

Oeconomia Copernicana ECONOMICS-

CiteScore

13.70

自引率

5.90%

发文量

审稿时长

24 weeks

期刊介绍： The Oeconomia Copernicana is an academic quarterly journal aimed at academicians, economic policymakers, and students studying finance, accounting, management, and economics. It publishes academic articles on contemporary issues in economics, finance, banking, accounting, and management from various research perspectives. The journal's mission is to publish advanced theoretical and empirical research that contributes to the development of these disciplines and has practical relevance. The journal encourages the use of various research methods, including falsification of conventional understanding, theory building through inductive or qualitative research, first empirical testing of theories, meta-analysis with theoretical implications, constructive replication, and a combination of qualitative, quantitative, field, laboratory, and meta-analytic approaches. While the journal prioritizes comprehensive manuscripts that include methodological-based theoretical and empirical research with implications for policymaking, it also welcomes submissions focused solely on theory or methodology.