Abstract
This study employs a quantile regression approach to investigate the moderating role of board characteristics in the relationship between environmental, social, and governance (ESG) reporting and the financial performance of multinational enterprises (MNEs). The study utilizes panel data from the largest listed MNEs between 2009 and 2019. The findings suggest that the impact of ESG reporting on financial performance varies significantly across different quantile levels of firm performance. Specifically, the positive effect of board characteristics, as measured by the Board Organization and Characteristics Index (BOCI), on the relationship between ESG reporting and financial performance is observed at the median and higher quantiles. However, the study also reveals a negative moderating effect of BOCI on the relationship between ESG disclosure and market-based measures at the lower and median quantiles, but not at the upper quantile level. The study highlights the importance of board characteristics in the complex interplay between ESG reporting and financial performance for MNEs.
| Original language | English |
|---|---|
| Pages (from-to) | (In-Press) |
| Number of pages | 40 |
| Journal | International Journal of Business Governance and Ethics |
| Volume | (In-Press) |
| Publication status | Accepted/In press - 8 May 2024 |
Keywords
- ESG disclosure
- multinational enterprises
- board characteristics
- quantile regression