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Does corporate ESG news impact firm productivity?

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  • Arthur, Joseph
  • Bilson Darku, Francis
  • Owusu, Abena Fosua

Abstract

This paper examines the relationship between ESG and firm productivity, addressing how ESG news impacts productivity across operational and financial dimensions. Using Truvalue Lab's AI-generated ESG score data, we analyze how near- and long-term ESG news scores influence key productivity indicators such as sales generation, operating costs (SG&A), and labor costs. We find that non-financial firms with positive ESG news scores experience reduced productivity, as ESG news improves sales, decreases operating costs, and increases labor costs. These findings highlight how ESG influences various operational and financial aspects of firm productivity.

Suggested Citation

  • Arthur, Joseph & Bilson Darku, Francis & Owusu, Abena Fosua, 2025. "Does corporate ESG news impact firm productivity?," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001485
    DOI: 10.1016/j.frl.2025.106883
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    1. Petcu Alma Maria & Theodorescu Andreea, 2025. "Performance Drivers in a Sustainability-Oriented Economy," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 19(1), pages 1429-1439.

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    Keywords

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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