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The Benefits of Workforce Well-Being on Profitability in Listed Companies: A Comparative Analysis between Europe and Mexico from an ESG Investor Perspective

Author

Listed:
  • Oscar V. De la Torre-Torres

    (Facultad de Contaduría y Ciencias Administrativas, Universidad Michoacana de San Nicolás de Hidalgo, Morelia 58000, Mexico)

  • Francisco Venegas-Martínez

    (Escuela Superior de Economía, Instituto Politécnico Nacional, México 07320, Mexico)

  • José Álvarez-García

    (Departamento de Economía Financiera y Contabilidad, Instituto Universitario de Investigación para el Desarrollo Territorial Sostenible (INTERRA), Universidad de Extremadura, 10071 Cáceres, Spain)

Abstract

This paper evaluates the relationship between investing in workforce well-being and profitability of listed companies in Mexico compared to European companies from an Environmental, Social, and Governance (ESG) investor perspective. In this case, the Refinitiv workforce score or High-Performance Work Policies (HPWP) is used as an indicator of the quality of workforce well-being by including the industry effects (economic and business sectors) and the behavioral (sentiment) factors as control variables. Specifically, this article examines the relationships between HPWP, stock price changes (measured as a percentage), profitability (ROE), and market risk (betas). We used a sample of companies from the Refinitiv Mexico and European stock indices for this purpose. In the Mexican case, the results show that a higher level of well-being promotion relates to better company profits. The opposite happens in European companies. Regarding market prices, European companies show higher prices when they have higher HPWP and Mexican companies confirm the opposite. Regarding market risk, only European basic materials with high HPWP show less risk. Finally, in almost all Mexican business sectors, the relationship between market risk and workforce well-being is negative.

Suggested Citation

  • Oscar V. De la Torre-Torres & Francisco Venegas-Martínez & José Álvarez-García, 2024. "The Benefits of Workforce Well-Being on Profitability in Listed Companies: A Comparative Analysis between Europe and Mexico from an ESG Investor Perspective," JRFM, MDPI, vol. 17(3), pages 1-23, March.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:3:p:118-:d:1356548
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    References listed on IDEAS

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    1. George MacKerron, 2012. "Happiness Economics From 35 000 Feet," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 705-735, September.
    2. Carhart, Mark M, 1997. "On Persistence in Mutual Fund Performance," Journal of Finance, American Finance Association, vol. 52(1), pages 57-82, March.
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    1. Leonir Vilani & Antonio Zanin & Mauro Lizot & Marcelo Gonçalves Trentin & Paulo Afonso & José Donizetti de Lima, 2024. "A Framework for Investment and Risk Assessment of Agricultural Projects," JRFM, MDPI, vol. 17(9), pages 1-15, August.

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