The Journal of the Convergence on Culture Technology (문화기술의 융합)

The International Promotion Agency of Culture Technology (국제문화기술진흥원)
권호 표지
DOI QR코드

DOI QR Code

A Non-linear Analysis of the Effect of R&D and the Visibility in the Relationship between ESG and Corporate Financial Performance

ESG와 기업재무성과의 관계에서 R&D와 가시성의 효과의 비선형 분석

  • 한명훈 (강원대학교 산학협력단) ;
  • 정헌용 (남서울대학교 경영학과)
  • Received : 2024.09.13
  • Accepted : 2024.11.01
  • Published : 2024.11.30
Download PDF
⟨ Previous Next ⟩

Abstract

This study examines the impact of ESG ratings on corporate financial performance among Korean firma, employing both linear and nonlinear analyses to asess the mediating effect of R&D investments, and the moderating effect of corporate visibility. The key findings are as follows: First, higher ESG ratings were found to significantly increase corporate financial performance; however, beyond a certain threshold, financial performance begins to decline. Second, as ESG ratings increased, R&D investments also significantly increased, suggesting that ESG activities promote corporate innovation and R&D efforts. Third, R&D investments were shown to positively mediate the relationship between ESG and corporate financial performance. Lastly, corporate visibility was found to positively moderate the impact of ESG on financial performance. The inverse U-shaped relationship between ESG ratings and financial performance suggests that excessive ESG activities may incur additional costs. Therefore, firms should identify an optimal level of ESG engagement to sustain financially viable ESG practices.

본 연구는 한국 기업을 대상으로 ESG 등급이 기업재무성과에 미치는 영향과 연구개발투자의 매개효과 및 기업 가시성의 조절효과를 선형 및 비선형적으로 분석하였다. 본 연구의 주요한 결과는 다음과 같다. 첫째, ESG 성과가 높으면 기업재무성과가 유의하게 증가하지만 일정 수준을 넘어서면 재무성과가 감소하는 것으로 나타났다. 둘째, ESG 등급이 높을수록 연구개발투자가 유의하게 증가하여 ESG 활동이 기업의 혁신과 연구개발 활동을 촉진하는 것으로 나타났다. 셋째, 연구개발투자는 ESG가 기업재무성과에 미치는 영향을 긍정적으로 매개하는 것으로 나타났다. 마지막으로, 기업 가시성은 ESG가 기업재무성과에 미치는 영향을 긍정적으로 조절하는 것으로 나타났다. ESG 등급과 재무성과 간의 역 U자형의 관계는 과도한 ESG 활동은 비용을 발생시킬 수 있으므로 기업은 최적의 수준을 찾아 지속가능한 ESG 활동을 전개하여야 한다는 것을 시사한다.

Keywords

References

  1. J. Choi and H. Jung, "The Impact of ESG Ratings on Earnings Adjustments and Investment Efficiency", The Journal of the Convergence on Culture Technology, Vol.10, No.4, pp. 323-329, 2024. https://dx.doi.org/10.17703/JCCT.2024.10.4.323
  2. J. W. Shim, "The Effect of Overconfidence and ESG level on Investment Efficiency", Global Business Administration Review, Vol.20, No.6, pp. 20-39, 2023. https://doi.org/10.38115/asgba.2023.20.6.20
  3. M. Benlemlih and M. Bitar, "Corporate Social Responsibility and Investment Efficiency", Journal of Business Ethics, Vol.148, No.3, pp. 647-671, 2018 https://dx.doi.org/10.2139/ssrn.510602
  4. I. Harymawan, M. Nasih, D. Agustia, and F. K. G. Putra, "Investment Efficiency and Environmental, Social, and Governance Reporting: Perspective from Corporate Integration Management," Corporate Social Responsibility and Environmental Management, Vol.29, No.5, pp. 1186-1202, 2022. https://dx.doi.org/10.1002/csr.2263
  5. N. O. D. Ellili, "Impact of Environmental, Social and Governance Disclosure on Dividend Policy: What is the Role of Corporate Governance? Evidence from an Emerging Market," Corporate Social Responsibility and Environmental Management, Vol.29, No.5, pp. 1396-1413, 2022. https://dx.doi.org/10.1002/csr.2277
  6. D. Wang, "Founding Family Ownership and Earnings Quality," Journal of Accounting Research, Vol.44, No.3, pp. 619-656, 2006. https://doi.org/10.1111/j.1475-679X.2006.00213.x
  7. T. Fu and J. Li, "An Empirical Analysis of the Impact of ESG on Financial Performance: the Moderating Role of Digital Transformation," Frontiers in Environmental SAcience, Vol.11, pp. 1-11, 2023. https://doi.org/10.3389/fenvs.2023.1256052
  8. Y. Xu and N. Zhu, "The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints," Sustainability, Vol.16, No.8, 3329, 2024. https://doi.org/10.3390/su16083329
  9. G. Pu, "A Non-linear Assessment of ESG and Firm Performance Relationship: Evidence fromChina," Economic Research-Ekonomska Istrazivanja, Vol. 36, No. 5, pp. 1-17. 2022. https://doi.org/10.1080/1331677X.2022.2113336
  10. E. T. Lee and X.. Li, "Too much of a good thing? Exploring the curvilinear relationship between environmental, social, and governance and corporate financial performance," Asian Journal of Business Ethics, Vol.11, No.2, pp. 399-42, 2018, https://doi.org/10.1007/s13520-022-00157-y
  11. C. J. Chen, R. S. Guo, Y. C. Hsiao, K. L. Chen, "How business strategy in non- financial firms moderates the curvilinear effects of corporate social responsibility and irresponsibility on corporate financial performance," Journal of Business Research, Vol.92, pp. 154-167, 2018 https://doi.org/10.1016/j.jbusres.2018.07.030
  12. G. Ahmadova, B. L. Delgado-M'arquez, L. E. Pedauga, and D. I. Leyva-de la Hiz, D. I., "Too good to be true: The inverted U-shaped relationship between home-country digitalization and environmental performance," Ecological Economics, Vol.196, 107393, 2022 https://doi.org/10.1016/j.ecolecon.2022.107393
  13. E. Bianchi, J. M. Bruno, and F.SarabiaSanchez, "The Impact of Perceived CSR on Corporate Reputation and Purchase Intention," European Journal of Managem,ent and Business Economics, Vol.28, No.3, pp. 206-221, 2019. https://doi.org/10.1108/EJMBE-12-.2017-0068
  14. M. Erdogan and A. Yamaltdinova, "A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market," Procedia Computer Science, Vol.158, pp. 541-545, 2019. https://doi.org/10.1016/j.procs.2019.09.087
  15. A. R. Freihat and R.. Kanakriyah, "Impact of R&D Expenditure on Financial Performance: Jordanian Evidence," European Journal of Business and Management, Vol.9, No.32, pp. 73-83, 2017.
  16. R. Casciello, R. Santonastaso, M. Prisco, and I. Martino, "Green Innovation and Financial Performance. The Role of R&D Investments and ESG Disclosure," Corporate Social Responsibility and Environmental Management, 2024. https://doi.org/10.1002/csr.2862
  17. Q. L. Kweh, I. W. K. Ting, C. Ren, and W. Lu, "Environmental, social, and governance and corporate efficiency: mediating role of R&D in achieving sustainable development goals," Applied Economics, Vol.56, No.51, pp. 6347-6359, 2023. https://doi.org/10.1080/00036846.2023.2273239
  18. C. Dawkins and J. W. Fraas, "Coming Clean: The Impact of Environmental Performance and Visibility on Corporate Climate Change Disclosure, " Journal of Business Ethics, Vol.100, pp. 303-322, 2010. https://doi.org/10.1007/s10551-010-0681-0
  19. H. Servaes and A. Tamayo, "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness, Management Science, Vol.59, No.5, pp. 1045-1061, 2013. https://dx.doi.org/10.1287/mnsc.1120.1630
  20. A. Aouadi, and S. Marsat, "Do ES20Con troversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Vol.151, pp. 1027-1047, 2018 https://doi.org/10.1007/s10551-016-3213-8
  21. J. Choi and H. Jung, "The Role of Cost of Capital and Visibility in the Impact of ESG on Sustainable Growth Rate," Asia-pacific Journal of Convergent Research Interchange, Vol.10, No.9, pp. 157-166. 2024. https://dx.doi.org/10.47116/apjcri.2024.09.15