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Does the COVID-19 Pandemic Highlights the Value of Firm’s ESG Performance?

Author

Listed:
  • Ching-Feng Chen
  • Yuan Chang

Abstract

This study investigates whether Environmental, Social, and Governance performance mitigates the adverse impact of the COVID-19 pandemic on firm financial performance using panel data for non-financial firms listed on the Taiwan Stock Exchange and the Taipei Exchange from 2016 to 2023. We employ multiple ESG proxies, including aggregate ESG ratings and score, disaggregated ESG scores, industry-adjusted rankings, and an extensive set of firm-level financial and governance controls, and estimate the models using regression analysis. The results show that firm financial performance deteriorated significantly during the COVID-19 period. However, firms with stronger ESG performance experienced markedly smaller performance declines, consistent with an insurance-like role of ESG. This moderating effect is most pronounced for the governance and social dimensions, indicating that robust ESG practices enhance firms’ ability to absorb exogenous shocks. Overall, the findings highlight ESG performance as a resilience mechanism that supports financial stability and sustainable competitiveness. From a practical standpoint, the evidence suggests that firms should integrate ESG considerations into core strategic and risk management processes, while policymakers may promote ESG adoption to strengthen capital market resilience.

Suggested Citation

  • Ching-Feng Chen & Yuan Chang, 2026. "Does the COVID-19 Pandemic Highlights the Value of Firm’s ESG Performance?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 18(3), pages 1-54, March.
    • Handle: RePEc:ibn:ijefaa:v:18:y:2026:i:3:p:54
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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