Effect of Accounting and ESG Controversies on Financial Performance: Moderating Effect of ESG

Abstract

This study unveils the crucial impact of ESG (Environmental, Social and Governance) performance on controversies and the firm performance nexus for companies listed in S&P1500. We measure firm performance regarding market-based (Tobin’s Q) and profitability-based (ROA) performance, while controversies are gauged by accounting and ESG-related issues. To achieve the highest level of accuracy, we employ the System Generalized Method of Moments (GMM) estimation to address for endogeneity. The key findings reveal a positive interaction effect between lagged ESG and controversies about market-based performance. However, lagged ESG does not significantly impact profitability-based performance measures in the context of controversies.

Keywords

• Accounting Controversies
• ESG Controversies
• ESG
• Market Based Performance
• Profitability Based Performance

Muhasebe ve ESG Tartışmalarının Finansal Performans Üzerindeki Etkisi: ESG’nin Düzenleyici Rolü

Abstract

Bu çalışma, S&P1500'de listelenen şirketler için ESG performansının tartışmalar ve şirket performansı bağlantısı üzerindeki etkisini ölçmektedir. Şirket performansı, piyasa bazlı (Tobin's Q) ve karlılık bazlı (ROA) performans olarak ölçülmekte, tartışmalar ise muhasebe ve ESG ile ilgili tartışmalar olarak değerlendirilmektedir. Endojeniteyi kontrol etmek için Sistem Genelleştirilmiş Momentler Metodu (GMM) tahmini kullanılmaktadır. Sonuçlar, gecikmeli ESG'nin tartışmalar ve piyasa bazlı performans arasında pozitif bir etkileşim etkisi gösterdiğini kanıtlamaktadır. Gecikmeli ESG, tartışmalar ve karlılık bazlı performans ölçümleri arasında önemli bir etki gösterememiştir.

Keywords

• Muhasebe Tartışmaları
• ESG Tartışmaları
• Çevresel
• Sosyal ve Yönetişim (ESG)
• Piyasa Bazlı Performans
• Karlılık Bazlı Performans

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