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Impact of Environmental, Social, and Governance Activities on the Financial Performance of Indian Health Care Sector Firms: Using Competition as a Moderator

Author

Listed:
  • Bhakti Agarwal

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

  • Rahul Singh Gautam

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

  • Pooja Jain

    (Amity Business School, Amity University, Gwalior 474020, India)

  • Shailesh Rastogi

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

  • Venkata Mrudula Bhimavarapu

    (Symbiosis School of Banking and Finance, Symbiosis International (Deemed University), Pune 412115, India)

  • Saumya Singh

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

Abstract

Environmental, social, and governance (ESG) activities have become essential and viable activities of corporations because of the increase in concern for environmental, social, and governance issues. The motive of this research is to measure the effect of ESG on the financial performance (FP) of healthcare corporations using the market-to-book value (MTB) ratio as a proxy of FP. A sample of 33 pharma companies in India from 2011 to 2020 has been considered. The study relies on the panel data method to assess the association between ESG and FP. The potential moderating role of competition has also been studied to simplify their relationship in this framework. The finding of this study is that there is a significant negative association between ESG and FP, and it is also found that when competition is used as a moderator, it results in a significantly positive impact on the ESG and FP of healthcare companies. This study increases the understanding of the association between ESG and FP and helps corporations to formulate corporate strategies and stakeholders to make investment decisions. The originality of this study is that it addresses the impact of competition on ESG and FP of the healthcare industry and will become foundational literature for future studies.

Suggested Citation

  • Bhakti Agarwal & Rahul Singh Gautam & Pooja Jain & Shailesh Rastogi & Venkata Mrudula Bhimavarapu & Saumya Singh, 2023. "Impact of Environmental, Social, and Governance Activities on the Financial Performance of Indian Health Care Sector Firms: Using Competition as a Moderator," JRFM, MDPI, vol. 16(2), pages 1-11, February.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:2:p:109-:d:1064414
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    References listed on IDEAS

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    1. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2022. "Exploring the impact of sustainability (ESG) disclosure on firm value and financial performance (FP) in airline industry: the moderating role of size and age," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5052-5079, April.
    2. Yamina Chouaibi & Matteo Rossi & Ghazi Zouari, 2021. "The Effect of Corporate Social Responsibility and the Executive Compensation on Implicit Cost of Equity: Evidence from French ESG Data," Sustainability, MDPI, vol. 13(20), pages 1-17, October.
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    Cited by:

    1. Svetlozar (Zari) Rachev & W. Brent Lindquist, 2023. "Editorial on the Volume “ESG Investing and ESG Finance”," JRFM, MDPI, vol. 16(10), pages 1-2, September.
    2. Ioannis Andreadis & Athanasios D. Fragkou & Theodoros E. Karakasidis & Apostolos Serletis, 2024. "The credit card-augmented Divisia monetary aggregates: an analysis based on recurrence plots and visual boundary recurrence plots," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-26, December.
    3. Dossa, Joel Victor & Ukwuoma, Chiagoziem C. & Thomas, Dara & Dossa, James Mhoja & Gopang, Aamir Ali, 2025. "Prediction of nexus among ESG disclosure and firm Performance: Applicability, explainability and implications," Innovation and Green Development, Elsevier, vol. 4(4).
    4. Ertz Myriam & Gautier George Yao Quenum & Mouhamadou Moustapha Gueye & Chourouk Ouerghemmi & Moussa Sacko, 2025. "More Money, More Ethical Commitment? How Corporate Financial Performance Influences Environmental Social and Governance Practices," IJFS, MDPI, vol. 13(3), pages 1-20, August.
    5. Konrad Brodaczewski, 2026. "Implementation of ESG Principles in the Production and Distribution of Medical Devices to Improve the Quality of Medical Services and Social Responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 33(1), pages 757-768, January.
    6. Rao, Amar & Dagar, Vishal & Sohag, Kazi & Dagher, Leila & Tanin, Tauhidul Islam, 2023. "Good for the planet, good for the wallet: The ESG impact on financial performance in India," Finance Research Letters, Elsevier, vol. 56(C).
    7. Mochamad Roland Perdana & Achmad Sudiro & Kusuma Ratnawati & Rofiaty Rofiaty, 2023. "Does Sustainable Finance Work on Banking Sector in ASEAN?: The Effect of Sustainable Finance and Capital on Firm Value with Institutional Ownership as a Moderating Variable," JRFM, MDPI, vol. 16(10), pages 1-19, October.
    8. Vinaytosh Mishra & Majdi Anwar Quttainah, 2023. "A System Thinkingbased Framework for Sustainable Governance in Healthcare," Indian Journal of Corporate Governance, , vol. 16(2), pages 272-297, December.
    9. Mohammad Mizenur Rahaman & Shamima Akter & Md Alamgir Hossain & Adiba Rahman Bushra Chowdhury & Renhong Wu, 2024. "Green accounting and reporting in Bangladesh’s pharmaceutical and textile industries: A holistic perspective," PLOS ONE, Public Library of Science, vol. 19(9), pages 1-22, September.

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