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The dynamic causality between ESG and economic growth: Evidence from panel causality analysis

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  • Ho, Sy-Hoa
  • OUEGHLISSI, Rim
  • EL FERKTAJI, Riadh

Abstract

The relationship between Environmental, Social and Governance (ESG) performance and economic growth is a controversial topic in economic literature. This paper applies the Granger causality test developed by Dumitrescu and Hurlin (2012) with an optimal lag length selection technique proposed by Han et al. (2017) to examine the causality relationship between ESG performance and economic growth for a set of 118 countries over the period 1999-2015. The empirical results show the presence of a bidirectional relationship between environmental and social performance and economic growth, while a unidirectional relationship from governance to growth for all countries. Unlike the clear overall pattern of the full sample results, the empirical evidence for different income groups of countries is mixed.

Suggested Citation

  • Ho, Sy-Hoa & OUEGHLISSI, Rim & EL FERKTAJI, Riadh, 2019. "The dynamic causality between ESG and economic growth: Evidence from panel causality analysis," MPRA Paper 95390, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95390
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    References listed on IDEAS

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    Cited by:

    1. Bertrand Kian Hassani & Yacoub Bahini, 2022. "Relationships between ESG Disclosure and Economic Growth: A Critical Review," JRFM, MDPI, vol. 15(11), pages 1-23, November.
    2. Costantiello, Alberto & Leogrande, Angelo, 2023. "The Role Of Gdp Growth In The Esg Approach At World Level," SocArXiv r56hu, Center for Open Science.
    3. Jiazhen Wang & Jing Yu & Rui Zhong, 2023. "Country environmental, social and governance performance and economic growth: The international evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 3911-3941, December.

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    More about this item

    Keywords

    ESG; GDP per capita; Granger causality estimation;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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