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Corporate innovation culture and ESG: Evidence from textual analysis in emerging market

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  • Likitapiwat, Tanakorn
  • Starita, Stefano
  • Treepongkaruna, Sirimon
  • Chan, Kam Fong

Abstract

Using Li et al.’s (2021b) culture dictionary, developed through word embedding technique, we study the impact of corporate innovation culture on the ESG performance of firms. We focus on Thai's companies, since Thailand's unique economic and cultural contexts provide key insights into how innovation culture affects ESG performance in emerging markets. Consistent with the institutional, stakeholder and legitimacy hypotheses, we find that a one-unit standard deviation increase in innovation culture is significantly associated with 21.1% rise in ESG scores. This finding, robust across various econometric tests, underscores the importance of innovation culture in shaping corporate sustainability in emerging markets.

Suggested Citation

  • Likitapiwat, Tanakorn & Starita, Stefano & Treepongkaruna, Sirimon & Chan, Kam Fong, 2024. "Corporate innovation culture and ESG: Evidence from textual analysis in emerging market," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524005317
    DOI: 10.1016/j.econlet.2024.112047
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    References listed on IDEAS

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    Cited by:

    1. Tian, Lihui & Wu, Haifeng & Zhu, Xiaoman, 2025. "Does climate risk perception drive the realization of corporate environmental responsibility?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 47(C).
    2. Nochebuena-Evans, Leiza & Evans, Robert D. & Tarkom, Augustine, 2025. "The role of social capital on corporate social anti-activism and firm stock price: Evidence from DEI program elimination," Economics Letters, Elsevier, vol. 252(C).
    3. Likitapiwat, Tanakorn & Treepongkaruna, Sirimon & Starita, Stefano, 2025. "Culture counts: Exploring firm performance through machine-learning based corporate culture in Thailand," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).

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    • G3 - Financial Economics - - Corporate Finance and Governance

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