IDEAS home Printed from https://ideas.repec.org/a/oap/ijaefa/v22y2025i1p18-30id2236.html
   My bibliography  Save this article

ESG Ratings and Firm Performance with Moderating Role of Corporate Governance Mechanism: Evidence from Thai Settings

Author

Listed:
  • Prawat Benyasrisawat

Abstract

This paper aims to add empirical evidence to the existing literature in the arena of Environmental, Social, and Governance (ESG) information, firm performance, and stock market participation within a Thai context. Based on the dynamic analysis with the two-step system generalized method of moments, the instruments consist of the corporate governance mechanism. Results have indicated that the association between ESG scores and firm performance is statistically significant, with the moderating role of corporate governance. ESG-driven firms tend to have higher firm performance relative to non-ESG-driven firms. The overall result suggests that firm performance is more pronounced when the firm implements ESG policy. However, I argue that results should be interpreted with caution because 1) firm-specific factors may influence the outcome of ESG investment and 2) the outcome of ESG strategies may require a longer time to be identified. This paper also examines whether and how the stock market incorporates ESG information for its decisions. There is a negative association between excess returns and ESG performance. The result suggests that the stock market views ESG information as being able to mitigate information asymmetry. Two different ESG measures based on the Stock Exchange of Thailand and the third-party criteria are employed for the analysis, and I posit that the results based on those measures are qualitatively similar. This will endorse the usefulness of ESG information.

Suggested Citation

  • Prawat Benyasrisawat, 2025. "ESG Ratings and Firm Performance with Moderating Role of Corporate Governance Mechanism: Evidence from Thai Settings," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 22(1), pages 18-30.
    • Handle: RePEc:oap:ijaefa:v:22:y:2025:i:1:p:18-30:id:2236
    as

    Download full text from publisher

    File URL: http://onlineacademicpress.com/index.php/IJAEFA/article/view/2236/1122
    Download Restriction: no
    ---><---

    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:oap:ijaefa:v:22:y:2025:i:1:p:18-30:id:2236. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Heather Rothman (email available below). General contact details of provider: http://onlineacademicpress.com/index.php/IJAEFA/ .

    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.