• Journal of Environmental Science International
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• v.31 no.12
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• pp.1117-1126
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• 2022

This study analyzed the effect of Corporate Social Responsibility and ESG (Environmental, Social and Governance) score on information asymmetry from the perspective of investors, who are important stakeholders of the company. For KOSPI-listed companies from 2017 to 2020, the effect of ESG overall score and each item score (E, S, G) on the bid-ask spread, which is a proxy for information asymmetry, was confirmed. The results are as follows. First, the increase in corporate CSR activities resulted in lowering information asymmetry of investors. It was found that the higher the ESG score, an indicator of CSR activity, the lower the bid-ask spread, which is a proxy variable for information asymmetry. Second, as a result of analysis using ESG scores for each section, information asymmetry decreased as companies with higher scores in the environmental (E) and social (S) aspects, while the governance (G) score did not have a statistically significant effect. The analysis confirmed that corporate CSR activities can contribute to improving market efficiency by resolving information asymmetry of investors and convergence of the stock market into a state of equilibrium. This means that the company's CSR activities are reflected in the investment decision-making, which suggests that the company should consider the investor as a stakeholder in decision-making related to CSR activities.

• New & Renewable Energy
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• v.18 no.2
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• pp.60-72
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• 2022

The environmental, social, and governance (ESG) score is gaining recognition as important nonfinancial investment criteria. With climate change emerging as a global issue, energy companies must pay attention to the ESG impact on corporate performance. In this study, the ESG impact on the performance of energy companies was analyzed based on 23 companies selected from the S&P 500. The panel corrected standard error methodology was used. The Refinitiv ESG score was the independent variable, and financial performance metrics, such as Tobin's Q, return on assets, and return on equity, were the dependent variables. It was found that the ESG score is positively associated with long-term corporate value but not with short-term profitability in the electricity utility industry. Among the subcategories of ESG, the environmental and social scores also showed positive correlations with long-term corporate value. A direct incentive policy is recommended that can offset expenses for ESG activities to reduce carbon emission in the energy sector.

• Asia-Pacific Journal of Business
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• v.13 no.1
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• pp.103-123
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• 2022

Purpose - This study investigates the effects of earnings management, related party transactions between chaebol affiliates on earnings management and ESG score on their profitability using return on assets (ROA). Design/Methodology/Approach - We use data including ESG (Environmental, Social, and Corporate Governance) score of the Korea Corporate Governance Service(KCGS), and financial data of 10,145 firm-year observations from the Total Solution 2000 (TS 2000) and Korea Companies-Information Service (KOKOInfo), and apply the finite lagged models to investigate the long-term effects of related party transactions between chaebol affiliates of earnings management on ESG scores and corporate performance. Furthermore, to take into consideration the simultaneous mutual effects on each other of main variables, we introduce finite distributed lags of five years. Findings - First, ESG-rated firms have a higher total asset return than non-ESG-rated firms. Second, chaebol firms have a higher profitability than non-chaebol firms. Third, profit management of related party transactions between affiliates within a chaebol has a positive effect on the short-term profitability and a negative effect on the long-term profitability. Fourth, chaebol ESG firms have a lower impact on profitability due to rating up (down) than non-chaebol ESG firms. Research Implications or Originality - Based on the above results, it can be concluded that firms used related party transactions for earnings management, the effects of related party transactions change over time, and chaebol firms manipulate earnings through related party transactions and ESG scores.

• Analyses & Alternatives
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• v.8 no.2
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• pp.87-115
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• 2024

This study examines the effect of R&D investment on firm performance and value of Chinese private firms. Through R&D investment, firms aim to acquire knowledge and technological resources to create innovation and competitive advantage, which ultimately enhances firm performance and value. However, unlike other investments, R&D investments are characterized by high adjustment costs and risks, uncertainty and asymmetric information. In addition, the effect of R&D investment on firm performance and value has been shown to be mixed results due to various internal and external contextual factors. Therefore, this study intends to consider how the ESG activities of firms, which have recently attracted attention, act as a contextual factor in the results of R&D investment. This is because interaction with stakeholders through ESG activities is considered to be an important factor in securing competitive advantages and sustainable growth. In this context, this study measures the effect of a firm's R&D investment on its business performance by dividing it into financial performance and value, respectively, and examines the moderating effect of ESG score on the relationship. Based on empirical analysis of all Chinese private firms from 2010 to 2019, the results show that a firm's R&D investment has a negative impact on performance and a positive impact on value. Furthermore, a high ESG score of private firms positively moderates each relationship, emphasizing the importance of ESG activities.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.21-31
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• 2019

This paper examines how corporate social responsibility is related to the degree of asymmetric information in the Korean financial market. Recent theory argues that there is a negative relationship between a firm's corporate social responsibility and its information asymmetry. To test this hypothesis, we use the environment, social and governance (ESG) score, published by the Korean Corporate Governance Service, to proxy a firm's management practices toward socially responsible activities. In the entire sample of the Korean firms, we find contrasting results; the ESG score shows negative relationships with the price impact measure but statistically insignificant relationships with the dispersion of analyst forecasts. However, the ESG score shows negative relationships with both measures when we exclude chaebol affiliates from the sample. These findings are robust when we examine environmental, social and corporate governance scores separately. This set of results argues for the extant theory, expecting a negative relationship between a firm's engagement in corporate social responsibility and asymmetric information. It further argues for the importance of firm characteristics in determining the influence of socially responsible activities.

• Journal of Korea Society of Industrial Information Systems
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• v.29 no.3
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• pp.89-105
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• 2024

The purpose of the study is to examine the impact of ESG activities on brand value by linking the effectiveness of ESG activities to marketing, the most core part of a company. This study conducted an empirical analysis targeting companies listed on KOSPI and KOSDAQ from 2016 to 2022. Looking at the empirical analysis results of this study, first, in the individual analysis of ESG activities, it was confirmed that E (Environment) and G (Governance) have a significant positive influence on brand value. Second, in the environmental field, stakeholder response had a significant positive relationship with brand value, and in the governance field, the board of directors had a significant positive relationship with brand value. Through this study, we can provide logical evidence proving that ESG activities are important activities that must be carried out in advance to increase brand value. Among ESG activities, it was found that stakeholder response activities in the environmental field and board-related matters in the governance field play an important role in increasing brand value. It is also expected that it will serve as a catalyst for research on the importance of ESG activities in the marketing field.

• International Journal of Knowledge Content Development & Technology
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• v.14 no.2
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• pp.99-139
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• 2024

In this study, the library ESG evaluation indicators specialized for libraries were developed, and based on which, a survey was conducted targeting the actual libraries to evaluate the ESG level of libraries. As a result of the study, first, among the ESG evaluation indicators, the indicators of the social field and the governance field are demonstrating high in which field of the library's ESG evaluation indicators will appear the highest. The social area's high score of 3.70 seems to be because the protection of users' rights, occupational safety, and contribution to society and the local community are very closely related to the original role of the library. Second, it may be seen that there is a difference between the questions in the corporate governance part, while the averages are the same. In the case of library's cooperation, it turned out that it was 3.94 in the necessity evaluation of the evaluation indicators, but it was lowered to 3.61 in the actual library situation evaluation. Meanwhile, in connection with the activities of the director of library and the board of directors, it may be seen that the index evaluation increased from 3.32 to 3.58 in the actual evaluation.

• The Journal of Society for e-Business Studies
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• v.25 no.4
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• pp.155-168
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• 2020

Although many studies have been conducted on the impact of increasing social awareness of corporate social responsibility activities on financial and non-financial performances, the number of studies conducted by financial companies is relatively small compared to those conducted by non-financial companies such as manufacturing and service industries. Accordingly, this study explores the impact of corporate social responsibility activities on the Earnings Persistence of financial companies through a regression analysis that utilizes the conversion score of an ESG rating of a Korean listed company provided by the Korea Corporate Governance Service (KCGS) as a variable for the company's social responsibility activities. Through this analysis, the study found that, among the ESG scores that are variables of social responsibility activities, the ESG governance score was significant in the direction of (+) for the Earnings Persistence. In addition, the same study conducted by classifying the entire sample into six sub-industries shows that the ESG governance score in the banking industry was more significant compared to when the regression analysis was conducted on the entirety of the samples. Therefore, this study concludes that the soundness and reliability of corporate governance have a positive effect on Corporate Earnings Persistence.

• Asia-Pacific Journal of Business
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• v.13 no.1
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• pp.153-166
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• 2022

Purpose - ESG(Environmental, Social and Governance) rating is an indicator to predict the sustainable development and long-term value creation of enterprises, which is becoming more and more important. This study divided the ESG rating into each sector(E, S and G) to identify which ESG elements are effective in enhancing enterprise value according to the characteristics of the enterprise, which is different from previous studies. Design/methodology/approach - In this study, Bloomberg ESG Disclosure Score was used to empirically analyze the relationship between ESG ratings and corporate value by taking the listed companies of China's Shanghai Composite Index from 2017 to 2020 as the object. Findings - First, the relationship between ESG ratings and enterprise value shows a statistically significant positive correlation, which supports the results of previous studies. Second, the analysis results from the classification of ownership structure of enterprises (state-owned enterprises and non-state-owned enterprises) show that compared with state-owned enterprises, the ESG ratings of non-state-owned enterprises is more closely related to enterprise value. Third, the analysis of various industries (manufacturing and non-manufacturing) shows that compared with manufacturing, ESG scores of non-manufacturing has a more positive effect on enterprise value. Lastly, the analysis by industry type (heavy-contaminated companies, non-contaminated companies) confirmed that ESG scores of non-contaminated companies has a positive effect on corporate value than heavy-contaminated companies. Research implications or Originality - This study classified ESG evaluation grades(E, S and G) for listed companies in China and analyzed in detail how they affect corporate value according to corporate characteristics, drawing implications for what ESG indicators should be focused on to increase corporate value.

• Journal of Distribution Science
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• v.16 no.5
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• pp.31-43
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• 2018

Purpose - We examine how a Korean retail firm's social responsibility is related to its financial performances. The traditional view of corporation expects a negative relationship, while the stakeholder theory expects a positive one. Research design, data, and methodology - We adopt the ESG score, published by Korean Corporate Governance Service to measure the level of socially responsible activity for the Korean retail firms. The ordinary least square method is adopted to investigate this relationship. The publicly traded retail firms are examined from 2011 to 2016. Results - We find that the total ESG score is negatively related to ROE but shows no statistically significant relationship with ROA and Tobin's Q value. However, a firm's environmental score is negatively related with both of ROE and ROA. Its social score is no conclusive relationship with the performance measures. The governance score is negatively related to the value of Tobin's Q. Conclusions - This paper generally supports the traditional view of corporate theory, especially in terms of ROE. This evidence is not well aligned with the existing study for Korean corporations generally documenting positive relationships. We find almost no empirical evidence supporting the stakeholder theory of corporation in the Korean retail industry.