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ESG disclosure and labour investment efficiency

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  • da Silva, Paulo Pereira
  • Vieira, Isabel

Abstract

This study examines the impact of environmental, social and governance (ESG) disclosure on firms’ labour investment efficiency. Our results indicate that such impact is positive. ESG disclosure is more effective in curtailing over-hiring and when over-investment in physical capital is high. The uncovered positive association is mainly fuelled by the volume of social and governance disclosure (environmental disclosure barely affects labour investment efficiency), and is more pronounced for firms with a weaker corporate social responsibility performance. The results from the empirical analysis survive a battery of robustness tests, including the use of alternative measures to capture labour investment efficiency, different control variables in regression models, and controlling for endogeneity in ESG disclosure. Our analysis and findings are novel to the literature and contribute to ongoing debates about the impact of ESG disclosure on firms’ performance and about potential benefits and costs of mandatory disclosure.

Suggested Citation

  • da Silva, Paulo Pereira & Vieira, Isabel, 2025. "ESG disclosure and labour investment efficiency," Research in Economics, Elsevier, vol. 79(3).
    • Handle: RePEc:eee:reecon:v:79:y:2025:i:3:s1090944325000377
    DOI: 10.1016/j.rie.2025.101060
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