Universiti Teknologi Malaysia Institutional Repository

COVID-19 impact, financial and ESG performance: Evidence from G20 countries

Al Amosh, Hamzeh and Khatib, Saleh F. A. (2023) COVID-19 impact, financial and ESG performance: Evidence from G20 countries. Business Strategy and Development, 6 (3). pp. 310-321. ISSN 2572-3170

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Official URL: http://dx.doi.org/10.1002/bsd2.240

Abstract

During the pandemic, all countries of the world were affected by a health pandemic was the largest in the twenty-first century, which affected the performance of companies and put them in a difficult situation with the escalation of uncertainty. Our study evaluates the impact of the COVID-19 pandemic on firms' financial performance and the moderating role of environmental, social, and governance (ESG) performance in this relationship. Based on a large international panel dataset that includes nine countries from G20 extracted from the Thomson Reuters EIKON database for the period from 2016 to 2021, a set of statistical analyses was applied, including descriptive statistics, correlation matrix, fixed effect regression, and robust regression using GMM model. The findings indicate that the pandemic negatively affected financial performance significantly, while the performance of ESG limits this effect. Thus, companies engaged in ESG activities are the least affected during the pandemic. Fulfilling stakeholders' demands enhances companies' performance during crises and corporate directors' resort to maintaining the performance of ESG as one of the effective strategies during the crisis to reduce the impact of COVID-19 on financial performance. This study shows that compliance with ESG issues can mitigate negative financial impacts during crises and that while implementing ESG practices is costly, it satisfies stakeholders and generates financial gains for companies. Theoretically, we directed the theoretical lens to research through crisis and stakeholder theories to explain events.

Item Type:Article
Uncontrolled Keywords:COVID-19, crisis, ESG performance, financial performance, G20, stakeholders
Subjects:H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
Divisions:Management
ID Code:105758
Deposited By: Widya Wahid
Deposited On:15 May 2024 07:11
Last Modified:15 May 2024 07:11

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