AbstractThis paper investigates the association between environmental, social, and governance (ESG) disclosure and company profitability, as measured by return on assets (ROA). We first assess a method to indexing the ESG score of a large sample of U.S. listed companies based on MSCI ESG KLD STATS data from 2000 to 2016. The statistical model is run on 17,358 observations and studies the association of ROA and the three different dimensions of ESG score. Significant differences between industrial firms and financial intermediaries emerge. We find a significant and positive association between ESG and that the environmental awareness in banks is strongly related to profitability, providing implications for policy makers and policy takers.
AbstractManuscript TypeEmpiricalResearch Question/IssueConsidering the recent financial and economic crisis as a unique exogenous shock, our study investigates the financial performance of family‐controlled firms in "steady‐state" conditions as opposed to situations of severe economic distress. In addition, we focus our attentionwithinfamily firms in order to tease out the leadership (family or non‐family CEO) and family ownership (family ownership concentration or dispersion) conditions that allow some governance arrangements to perform better than others during an economic downturn.Research Findings/InsightsExamining the entire population of Italian industrial family and non‐family publicly listed companies over the period 2002–2012, we observe a significantly and consistently better performance of family‐controlled firms during the financial and economic crisis, a finding that proves to be robust to several analytical specifications, as well as to different performance measures (ROA, ROE). Then, focusing on family firms only, we find that mixed configurations (family CEOs with relatively lower family ownership concentration) produce better performance in the face of an external hazard.Theoretical/Academic ImplicationsOur study confirms the pivotal assumption of the socioemotional wealth perspective that the advantages of family firms show up exactly when ownership is at stake. Our results also add to the growing literature on the resilience of family firms, showing that they are more able than others to absorb exogenous shocks.Practitioner/Policy ImplicationsOur findings suggest the importance of crafting governance structures well in advance of a crisis. Our research speaks to policymakers, indicating the importance of family firms for national economies, and the political opportunity to sustain their growth and managerial development.
AbstractEnvironmental, social, and governance (ESG) criteria are increasingly important in all fields of economics. However, despite increasing interest from policy makers and financial regulators, literature relating to the insurance industry is still scarce. This paper aims to fill this gap by exploring the interaction between a set of financial ratios and environmental social governance scores of 107 large, listed US insurance companies for the period 2010–2018 for the purpose of identifying the determinants of ESG awareness. Larger, more profitable, and more solvent insurance companies show the highest level of ESG awareness. Our model contributes to shed light on the unfolding of ESG practices in the insurance industry.
