Does Industry Type Moderate the Impact of ESG on Financial Performance of Thai Listed Firms in Dow Jones Sustainability Indices (DJSI)?
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Abstract
This research studies the impact of ESG and its three pillars, comprising of environmental (E), social (S), and governance (G), on financial performance of Thai listed firms in Dow Jones Sustainability Indices (DJSI), and tests whether industry type acts as a moderator on the impact of ESG performance on firm financial performance. In addition, this research uses OLS with the tests for random and fixed effects on the secondary data of 25 Thai listed firms in Dow Jones Sustainability Indices (DJSI) during 2012–2022.
The results show an insignificant effect of ESG on financial performance. However, the governance pillar of ESG exhibits a positive and significant impact on financial performance. Furthermore, the interaction term between the governance pillar of ESG and industry type is negatively significant, indicating that industry type is a moderator on the relationship between the governance pillar of ESG and financial performance.
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