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Sustainability
Volume 15
Issue 7
10.3390/su15076176
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Article

The Impact of ESG Performance on the Value of Family Firms: The Moderating Role of Financial Constraints and Agency Problems

by
Christian Espinosa-Méndez
1,*,
Carlos P. Maquieira
2 and
José T. Arias
3
1
Departamento de Administración, Facultad de Administración y Economía, Universidad de Santiago de Chile, Santiago 835070, Chile
2
CENTRUM, Católica Graduate Business School, Pontificia Universidad Católica de Perú, Lima 15023, Peru
3
Business School, Universidad Católica de la Santísima Concepción, Concepción 4090541, Chile
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(7), 6176; https://doi.org/10.3390/su15076176
Submission received: 21 December 2022 / Revised: 12 January 2023 / Accepted: 26 January 2023 / Published: 3 April 2023
(This article belongs to the Special Issue Green Business Based on Environmental Sustainability)
Review Reports Versions Notes

Abstract

The main objective of this research is to shed more light on how ESG may be seen as a valuable investment for family firms. We study the impact of ESG performance on the value of family firms by considering the moderating role played by financial constraints and agency costs. Using an international sample of 254 firms that belong to the 500 largest family-owned firms worldwide over the period 2015–2021, we report that the overall ESG score is positively associated with firm value. Among the three ESG components, we find that environmental and social performances have a positive and statistically significant impact on firm value. However, we find no evidence of any significant effect of governance score on firm value. More importantly, we also find that the impact of ESG performance on firm value is lower under the presence of financial constraints and agency costs.
Keywords: ESG performance; family firms; financial constraints; agency problems ESG performance; family firms; financial constraints; agency problems

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MDPI and ACS Style

Espinosa-Méndez, C.; Maquieira, C.P.; Arias, J.T. The Impact of ESG Performance on the Value of Family Firms: The Moderating Role of Financial Constraints and Agency Problems. Sustainability 2023, 15, 6176. https://doi.org/10.3390/su15076176

AMA Style

Espinosa-Méndez C, Maquieira CP, Arias JT. The Impact of ESG Performance on the Value of Family Firms: The Moderating Role of Financial Constraints and Agency Problems. Sustainability. 2023; 15(7):6176. https://doi.org/10.3390/su15076176

Chicago/Turabian Style

Espinosa-Méndez, Christian, Carlos P. Maquieira, and José T. Arias. 2023. "The Impact of ESG Performance on the Value of Family Firms: The Moderating Role of Financial Constraints and Agency Problems" Sustainability 15, no. 7: 6176. https://doi.org/10.3390/su15076176

APA Style

Espinosa-Méndez, C., Maquieira, C. P., & Arias, J. T. (2023). The Impact of ESG Performance on the Value of Family Firms: The Moderating Role of Financial Constraints and Agency Problems. Sustainability, 15(7), 6176. https://doi.org/10.3390/su15076176

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