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Sustainability 2016, 8(10), 1005; doi:10.3390/su8101005

The Effect of Environmental, Social and Governance Consistency on Economic Results

Finance and Accounting Deparment, Universitat Jaume I, 12071 Castellón de la Plana, Spain
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Academic Editor: Giuseppe Ioppolo
Received: 29 July 2016 / Revised: 21 September 2016 / Accepted: 21 September 2016 / Published: 9 October 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

This study aims to explore how environmental, social and governance (ESG) consistency impacts the firm performance, specifically, the relationship between ESG performance and economic performance (EP). This study posits that the company’s commitment and effectiveness towards the creation of consistent competitive advantage in environmental, social and governance dimensions constitutes an intangible value that leads improvements in corporate performance. This work uses a panel dataset for listed firms of the EU-15 countries during the period 2002 to 2011 and applies Generalized method of moments (GMM) estimator system in order to address the potential unobserved heterogeneity and dynamic endogeneity. The main results reveal that the global effect of ESG performance on EP for those firms that present interdimensional consistency is greater than the rest, except for higher levels of ESG performance. View Full-Text
Keywords: firm performance; economic performance; environmental; social and governance performance; consistency; synergistic effect; generalized method of moments; endogeneity problems firm performance; economic performance; environmental; social and governance performance; consistency; synergistic effect; generalized method of moments; endogeneity problems
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Ferrero-Ferrero, I.; Fernández-Izquierdo, M.Á.; Muñoz-Torres, M.J. The Effect of Environmental, Social and Governance Consistency on Economic Results. Sustainability 2016, 8, 1005.

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