IDEAS home Printed from https://ideas.repec.org/a/ers/ijebaa/vxiiiy2025i3p76-97.html

Internationalization's Function in Reducing the Effect of ESG Disclosure on Financial Results: Case of Companies in the United Kingdom

Author

Listed:
  • Adel Necib
  • Anis Jarboui
  • Malek Elweeremmi

Abstract

Purpose: This study aims to investigate how disclosures on social, environmental, and governance practices affect the financial performance of non-financial companies listed on the London Stock Exchange's FTSE 100 from 2015 to 2024. Design/Methodology/Approach: To clarify the relationships between the variables, we used regression analysis on moderated data and regression on subgroups. Findings: The results reveal an unexpected finding: while the indicator of social responsibility has no discernible effect on the financial performance of businesses, the indicators of environmental responsibility and disclosure of governance practices cause a decline in business financial performance. It is possible to view the expenses associated with ESG practices as a waste of company resources, a misallocation, or, conversely, as an overinvestment. Practical Implications: Businesses that engage in internationalisation may see a decline in performance as a result of environmental responsibility disclosure and governance practices. In order to ensure the sustainability of environmental, social, and governance activities over the long term, managers must consistently provide higher and better financial performance. Originality/Value:

Suggested Citation

  • Adel Necib & Anis Jarboui & Malek Elweeremmi, 2025. "Internationalization's Function in Reducing the Effect of ESG Disclosure on Financial Results: Case of Companies in the United Kingdom," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 76-97.
    • Handle: RePEc:ers:ijebaa:v:xiii:y:2025:i:3:p:76-97
    as

    Download full text from publisher

    File URL: https://ijeba.com/journal/896/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kofi Mintah Oware & T. Mallikarjunappa, 2023. "Financial Performance and Gender Diversity: The Moderating and Mediating Effect of CSR Disclosure and Expenditure of Listed Firms in India," Vision, , vol. 27(2), pages 243-255, April.
    2. Mirela Cristea & Graţiela Georgiana Noja & Eleftherios Thalassinos & Daniel Cîrciumaru & Constantin Ștefan Ponea & Carmen Claudia Durău, 2022. "Environmental, Social and Governance Credentials of Agricultural Companies—The Interplay with Company Size," Resources, MDPI, vol. 11(3), pages 1-12, March.
    3. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
    4. Meiryani Meiryani & Shi-Ming Huang & Dezie Leonarda Warganegara & Moch Doddy Ariefianto & Vaeren Teresa & Helda Oktavianie, 2023. "The Effect of Industrial Type, Environmental Performance and Leverage on Carbon Emission Disclosure: Evidence from Indonesian LQ45 Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 622-633, July.
    5. Hendi Rohendi & Imam Ghozali & Dwi Ratmono, 2024. "Environmental, social, and governance (ESG) disclosure and firm value: the role of competitive advantage as a mediator," Cogent Business & Management, Taylor & Francis Journals, vol. 11(1), pages 2297446-229, December.
    6. Elena Platonova & Mehmet Asutay & Rob Dixon & Sabri Mohammad, 2018. "The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector," Journal of Business Ethics, Springer, vol. 151(2), pages 451-471, August.
    7. Patrick Velte & Martin Stawinoga, 2017. "Empirical research on corporate social responsibility assurance (CSRA): A literature review," Journal of Business Economics, Springer, vol. 87(8), pages 1017-1066, November.
    8. Silvia Carnini Pulino & Mirella Ciaburri & Barbara Sveva Magnanelli & Luigi Nasta, 2022. "Does ESG Disclosure Influence Firm Performance?," Sustainability, MDPI, vol. 14(13), pages 1-18, June.
    9. Ibrahim Khalifa Elmghaamez & Jacinta Nwachukwu & Collins G. Ntim, 2024. "ESG disclosure and financial performance of multinational enterprises: The moderating effect of board standing committees," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3593-3638, July.
    10. V. Veeravel & E. K. S. Sadharma & Bandi Kamaiah, 2024. "Do ESG disclosures lead to superior firm performance? A method of moments panel quantile regression approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 741-754, January.
    11. Ahmed Mohamed Habib & Nahia Mourad, 2024. "The Influence of Environmental, Social, and Governance (ESG) Practices on US Firms’ Performance: Evidence from the Coronavirus Crisis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2549-2570, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bin Wang & Chenchen Wei & Longmei Shi & Xiaoqiang Cheng & Xueqin Shi, 2025. "ESG and firm operational efficiency: evidence from Chinese listed companies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(1), pages 681-714, January.
    2. Mona Ali Mohamed Khalil & Mohamed Abdelraouf & Tamer Shahwan, 2026. "Evaluating the effect of corporate social responsibility (CSR) on corporate financial performance” an applied study on Egyptian stock market," Future Business Journal, Springer, vol. 12(1), pages 1-18, December.
    3. Walsh, Frank, 2013. "The union wage effect and ability bias: Evidence from Ireland," Economics Letters, Elsevier, vol. 119(3), pages 296-298.
    4. Gerry Boyle & Rory McElligott & Jim O'Leary, 2004. "Public-Private Wage Differentials in Ireland, 1994-2001," Economics Department Working Paper Series n1421004, Department of Economics, National University of Ireland - Maynooth.
    5. Jo Blanden & Stephen Machin, 2003. "Cross‐Generation Correlations of Union Status for Young People in Britain," British Journal of Industrial Relations, London School of Economics, vol. 41(3), pages 391-415, September.
    6. Laisney, François & Pohlmeier, Winfried & Staat, Matthias, 1991. "Estimation of labour supply functions using panel data: a survey," ZEW Discussion Papers 91-05, ZEW - Leibniz Centre for European Economic Research.
    7. Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
    8. Adele Bergin, 2015. "Employer Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable," LABOUR, CEIS, vol. 29(2), pages 194-223, June.
    9. Ahmed A. Elamer & Mounia Boulhaga, 2024. "ESG controversies and corporate performance: The moderating effect of governance mechanisms and ESG practices," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3312-3327, July.
    10. Barbosa, Anrafel de Souza & Crispim, Maria Cristina & da Silva, Luiz Bueno & da Silva, Jonhatan Magno Norte & Barbosa, Aglaucibelly Maciel & Correia, Lucas Miguel Alencar de Morais & Morioka, Sandra N, 2025. "Empirical analysis of workers' perceptions of ESG impacts on corporate sustainability performance: A methodological innovation combining the PLS-SEM, PROMETHEE-ROC and FIMIX-PLS methods," Technological Forecasting and Social Change, Elsevier, vol. 215(C).
    11. Manudeep Bhuller & Karl Ove Moene & Magne Mogstad & Ola L. Vestad, 2022. "Facts and Fantasies about Wage Setting and Collective Bargaining," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 29-52, Fall.
    12. Alejandro Donado, 2015. "Why Do Unionized Workers Have More Nonfatal Occupational Injuries?," ILR Review, Cornell University, ILR School, vol. 68(1), pages 153-183, January.
    13. Sabia, Joseph J., 2009. "School-year employment and academic performance of young adolescents," Economics of Education Review, Elsevier, vol. 28(2), pages 268-276, April.
    14. Patrick Velte, 2025. "Audit Quality and Materiality Disclosure Quality in Integrated Reporting: The Moderating Effect of Carbon Assurance Quality," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(3), pages 3785-3801, May.
    15. Dina El-Bassiouny & Peter Letmathe, 2019. "Political instability and corporate social responsibility: the case of Egypt," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 16(5), pages 745-767, June.
    16. Ouidad Yousfi & Nadia Loukil, 2024. "Environmental laws in France: What are the effects of the Grenelle laws on firms?," European Journal of Law and Economics, Springer, vol. 57(3), pages 347-389, June.
    17. Michael Baker & Yosh Halberstam & Kory Kroft & Alexandre Mas & Derek Messacar, 2024. "The Impact of Unions on Wages in the Public Sector: Evidence from Higher Education," NBER Working Papers 32277, National Bureau of Economic Research, Inc.
    18. James Bishop & Iris Chan, 2019. "Is Declining Union Membership Contributing to Low Wages Growth?," RBA Annual Conference Papers acp2019-06, Reserve Bank of Australia.
    19. Felipe Arenas-Torres & Miguel Bustamante-Ubilla & Roberto Campos-Troncoso, 2021. "Diversity of the Board of Directors and Financial Performance of the Firms," Sustainability, MDPI, vol. 13(21), pages 1-11, October.
    20. Gupta, Simran & Chaudhary, Pankaj & Dawar, Varun, 2025. "The amplified impact of ESG on banks with lower funding costs: Insights from G20 economies," Finance Research Letters, Elsevier, vol. 85(PC).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:ijebaa:v:xiii:y:2025:i:3:p:76-97. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ijeba.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.