Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets

Mehtap Öner; Aslı Aybars; Murat Çinko; Emre Zehir

Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets

Abstract

This study aims to provide a comprehensive analysis of how Environmental, Social, and Governance (ESG) practices of banks influence their financial and market performance, which are proxied by return on assets (ROA) and Tobin’s Q, respectively. The sample comprises 35 banks from 11 emerging market countries over the period from 2017 to 2022. To assess this relationship, two distinct models are estimated for each performance indicator, examining both contemporaneous and lagged effects. The results reveal a negative association between ESG scores and financial performance, consistent with the predictions of the Trade-off Hypothesis in that costs associated with ESG investments may outweigh their financial benefits . This negative relationship remains robust when considering the lagged effects. However, no significant impact is found between ESG practices and market performance, as proxied by Tobin’s Q, across the models tested. The findings of this study offer important insights into the role of ESG practices within the banking industry, especially in emerging economies where the adoption and implementation of these practices may be in the early phases and differ considerably among institutions.

Keywords

References

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Details

Primary Language

English

Subjects

Econometrics (Other)

Journal Section

Research Article

Authors

Mehtap Öner ^*
0000-0001-7527-5875
Türkiye

Aslı Aybars
0000-0002-7899-2367
Türkiye

Murat Çinko
0000-0001-8560-7482
Türkiye

Emre Zehir
0000-0002-0262-1826
Türkiye

Early Pub Date

October 17, 2025

Publication Date

October 21, 2025

Submission Date

May 24, 2025

Acceptance Date

July 14, 2025

Published in Issue

Year 2025 Volume: 9 Number: 2

IZ

https://izlik.org/JA39KA46FH

Cite

RIS / Bibtex

APA

Öner, M., Aybars, A., Çinko, M., & Zehir, E. (2025). Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets. Journal of Research in Economics, 9(2), 90-103. https://izlik.org/JA39KA46FH

AMA

1.Öner M, Aybars A, Çinko M, Zehir E. Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets. JORE. 2025;9(2):90-103. https://izlik.org/JA39KA46FH

Chicago

Öner, Mehtap, Aslı Aybars, Murat Çinko, and Emre Zehir. 2025. “Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from Emerging Markets”. Journal of Research in Economics 9 (2): 90-103. https://izlik.org/JA39KA46FH.

EndNote

Öner M, Aybars A, Çinko M, Zehir E (October 1, 2025) Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets. Journal of Research in Economics 9 2 90–103.

IEEE

[1]M. Öner, A. Aybars, M. Çinko, and E. Zehir, “Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets”, JORE, vol. 9, no. 2, pp. 90–103, Oct. 2025, [Online]. Available: https://izlik.org/JA39KA46FH

ISNAD

Öner, Mehtap - Aybars, Aslı - Çinko, Murat - Zehir, Emre. “Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from Emerging Markets”. Journal of Research in Economics 9/2 (October 1, 2025): 90-103. https://izlik.org/JA39KA46FH.

JAMA

1.Öner M, Aybars A, Çinko M, Zehir E. Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets. JORE. 2025;9:90–103.

MLA

Öner, Mehtap, et al. “Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from Emerging Markets”. Journal of Research in Economics, vol. 9, no. 2, Oct. 2025, pp. 90-103, https://izlik.org/JA39KA46FH.

Vancouver

1.Mehtap Öner, Aslı Aybars, Murat Çinko, Emre Zehir. Does Environmental, Social, Governance (ESG) Investments Influence Bank Performance? Cross-Country Evidence from emerging Markets. JORE [Internet]. 2025 Oct. 1;9(2):90-103. Available from: https://izlik.org/JA39KA46FH