IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v32y2024i3p1940-1953.html
   My bibliography  Save this article

Understanding the behavior of ESG in both OPEC and non‐OPEC countries? The implications for sustainable development reaching

Author

Listed:
  • Xin‐Yu Peng
  • Xing‐Yun Zou
  • Xin‐Xin Zhao
  • Chun‐Ping Chang

Abstract

Environmental, social, and governance (ESG) performance has increasingly become the most pressing concern for governments, social organizations, companies, and other stakeholders. Understanding macro ESG behavior can assist governments in achieving their sustainable development goals (SDGs). In this paper, we investigate whether the macro ESG index of OPEC and non‐OPEC oil‐producing countries over the period 1990–2020 exhibits mean‐reversion behavior and whether the external shocks are transient or permanent. By conducting a series of advanced panel stationarity tests, we find that the macro ESG indices of the sample countries do not exhibit mean‐reversion and that an external shock has a permanent effect. We also identifies the yearly structural breaks that occur in the sample countries and attempts to explain why. Our research suggests that governments should use policy interventions to counteract external shocks to macro ESG behavior so as to achieve sustainable development and long‐term performance stability.

Suggested Citation

  • Xin‐Yu Peng & Xing‐Yun Zou & Xin‐Xin Zhao & Chun‐Ping Chang, 2024. "Understanding the behavior of ESG in both OPEC and non‐OPEC countries? The implications for sustainable development reaching," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 1940-1953, June.
  • Handle: RePEc:wly:sustdv:v:32:y:2024:i:3:p:1940-1953
    DOI: 10.1002/sd.2748
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.2748
    Download Restriction: no

    File URL: https://libkey.io/10.1002/sd.2748?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Muhammad Azam & Zia Ur Rehman & Yusnidah Ibrahim, 2022. "Causal nexus in industrialization, urbanization, trade openness, and carbon emissions: empirical evidence from OPEC economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13990-14010, December.
    2. Elisa Menicucci & Guido Paolucci, 2022. "Board Diversity and ESG Performance: Evidence from the Italian Banking Sector," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
    3. Dongyi Zhou & Rui Zhou, 2021. "ESG Performance and Stock Price Volatility in Public Health Crisis: Evidence from COVID-19 Pandemic," IJERPH, MDPI, vol. 19(1), pages 1-15, December.
    4. Kalnbalkite, Antra & Brakovska, Vita & Terjanika, Viktorija & Pubule, Jelena & Blumberga, Dagnija, 2023. "The tango between the academic and business sectors: Use of co-management approach for the development of green innovation," Innovation and Green Development, Elsevier, vol. 2(4).
    5. Nazlioglu, Saban & Karul, Cagin, 2017. "A panel stationarity test with gradual structural shifts: Re-investigate the international commodity price shocks," Economic Modelling, Elsevier, vol. 61(C), pages 181-192.
    6. Yin, Hua-Tang & Chang, Chun-Ping & Anugrah, Donni Fajar & Gunadi, Iman, 2023. "Gender equality and central bank independence," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 661-672.
    7. Hu, Haiqing & Wei, Wei & Chang, Chun-Ping, 2019. "Do shale gas and oil productions move in convergence? An investigation using unit root tests with structural breaks," Economic Modelling, Elsevier, vol. 77(C), pages 21-33.
    8. Yuming Zhai & Zhenghuan Cai & Han Lin & Ming Yuan & Ye Mao & Mingchuan Yu, 2022. "Does better environmental, social, and governance induce better corporate green innovation: The mediating role of financing constraints," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1513-1526, September.
    9. Fen Zhang & Xiaonan Qin & Lina Liu, 2020. "The Interaction Effect between ESG and Green Innovation and Its Impact on Firm Value from the Perspective of Information Disclosure," Sustainability, MDPI, vol. 12(5), pages 1-18, March.
    10. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    11. Francesco Rosati & Lourenço Galvão Diniz Faria, 2019. "Business contribution to the Sustainable Development Agenda: Organizational factors related to early adoption of SDG reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 588-597, May.
    12. Motla, Ritu & Kumar, Ashok & Saxena, Neha & Sana, Shib Sankar, 2023. "Inventory optimization in a green environment with two warehouses," Innovation and Green Development, Elsevier, vol. 2(4).
    13. Lian, Yonghui & Ye, Tao & Zhang, Yiyang & Zhang, Lin, 2023. "How does corporate ESG performance affect bond credit spreads: Empirical evidence from China," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 352-371.
    14. Lee, Junsoo & Huang, Cliff J. & Shin, Yongcheol, 1997. "On stationary tests in the presence of structural breaks," Economics Letters, Elsevier, vol. 55(2), pages 165-172, August.
    15. Yahaya, Abdul-Kadri & Augustine, Liebo, 2023. "Livelihood activities in the Lawra Municipality of Ghana: A blessing or a curse to the riparian vegetation of the Black Volta Basin," Innovation and Green Development, Elsevier, vol. 2(4).
    16. Zheng, Mingbo & Wong, Chun Yee, 2024. "The impact of digital economy on renewable energy development in China," Innovation and Green Development, Elsevier, vol. 3(1).
    17. Broadstock, David C. & Chan, Kalok & Cheng, Louis T.W. & Wang, Xiaowei, 2021. "The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China," Finance Research Letters, Elsevier, vol. 38(C).
    18. Silva, Luan Carlos Santos & Ten Caten, Carla Schwengber & Gaia, Silvia, 2023. "Conceptual framework of green technology transfer at public university scope Brazilian," Innovation and Green Development, Elsevier, vol. 2(4).
    19. Chun-Ping Chang & Chien-Chiang Lee & Meng-Chi Hsieh, 2011. "Globalization, Real Output and Multiple Structural Breaks," Global Economic Review, Taylor & Francis Journals, vol. 40(4), pages 421-444, December.
    20. Wong, Woei Chyuan & Batten, Jonathan A. & Ahmad, Abd Halim & Mohamed-Arshad, Shamsul Bahrain & Nordin, Sabariah & Adzis, Azira Abdul, 2021. "Does ESG certification add firm value?," Finance Research Letters, Elsevier, vol. 39(C).
    21. Herenia Gutiérrez‐Ponce, 2023. "Sustainability as a strategy base in Spanish firms: Sustainability reports and performance on the sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(4), pages 3008-3023, August.
    22. Baker, Edward D. & Boulton, Thomas J. & Braga-Alves, Marcus V. & Morey, Matthew R., 2021. "ESG government risk and international IPO underpricing," Journal of Corporate Finance, Elsevier, vol. 67(C).
    23. Chang, Chun-Ping & Berdiev, Aziz N. & Lee, Chien-Chiang, 2013. "Energy exports, globalization and economic growth: The case of South Caucasus," Economic Modelling, Elsevier, vol. 33(C), pages 333-346.
    24. Muhammad Sadiq & Thanh Quang Ngo & Adamu Abdurrahman Pantamee & Khurshid Khudoykulov & Truong Thi Ngan & Luc Phan Tan, 2023. "The role of environmental social and governance in achieving sustainable development goals: evidence from ASEAN countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 170-190, January.
    25. Guangyou Zhou & Lian Liu & Sumei Luo, 2022. "Sustainable development, ESG performance and company market value: Mediating effect of financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3371-3387, November.
    26. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    27. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "New evidence on the convergence of per capita carbon dioxide emissions from panel seemingly unrelated regressions augmented Dickey–Fuller tests," Energy, Elsevier, vol. 33(9), pages 1468-1475.
    28. Jiang, Ping-Chuan & Feng, Gen-Fu & Yang, Hao-Chang, 2022. "New measurement of sovereign ESG index," Innovation and Green Development, Elsevier, vol. 1(2).
    29. Tang, Dragon Yongjun & Zhang, Yupu, 2020. "Do shareholders benefit from green bonds?," Journal of Corporate Finance, Elsevier, vol. 61(C).
    30. Chen, Xia & Fu, Qiang & Chang, Chun-Ping, 2021. "What are the shocks of climate change on clean energy investment: A diversified exploration," Energy Economics, Elsevier, vol. 95(C).
    31. Vu Minh Hieu & Nguyen Thai Hai, 2023. "The role of environmental, social, and governance responsibilities and economic development on achieving the SDGs: evidence from BRICS countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 1338-1360, March.
    32. Nazlioglu, Saban & Payne, James E. & Lee, Junsoo & Rayos-Velazquez, Marco & Karul, Cagin, 2021. "Convergence in OPEC carbon dioxide emissions: Evidence from new panel stationarity tests with factors and breaks," Economic Modelling, Elsevier, vol. 100(C).
    33. Lee, Chien-Chiang & Chang, Chun-Ping, 2009. "Stochastic convergence of per capita carbon dioxide emissions and multiple structural breaks in OECD countries," Economic Modelling, Elsevier, vol. 26(6), pages 1375-1381, November.
    34. Shikha Bhatia & Divya Marwaha, 2022. "The Influence of Board Factors and Gender Diversity on the ESG Disclosure Score: A Study on Indian Companies," Global Business Review, International Management Institute, vol. 23(6), pages 1544-1557, December.
    35. Kim, Incheol & Ryou, Ji Woo & Yang, Rong, 2020. "The color of shareholders' money: Institutional shareholders' political values and corporate environmental disclosure," Journal of Corporate Finance, Elsevier, vol. 64(C).
    36. Mingbo Zheng & Gen-Fu Feng & Xinxin Zhao & Chun-Ping Chang, 2023. "The transaction behavior of cryptocurrency and electricity consumption," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-18, December.
    37. Cosimo Magazzino & Mihai Mutascu & Marco Mele & Samuel Asumadu Sarkodie, 2021. "Energy consumption and economic growth in Italy: A wavelet analysis," Post-Print hal-03539125, HAL.
    38. Xing-Yun Zou & Xin-Yu Peng & Xin-Xin Zhao & Chun-Ping Chang, 2023. "The impact of extreme weather events on water quality: international evidence," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 115(1), pages 1-21, January.
    39. Mushafiq, Muhammad, 2023. "Towards green development: Role of researchers," Innovation and Green Development, Elsevier, vol. 2(4).
    40. Li, Guanshu & Wang, Yidi & Zhou, Siyang & Lu, Zhonggui & Yin, Tao, 2023. "Effectiveness and challenge of environmental impact assessment in industrial park, a case study in Northeast rust belt China," Innovation and Green Development, Elsevier, vol. 2(4).
    41. Cai, Ye & Pan, Carrie H. & Statman, Meir, 2016. "Why do countries matter so much in corporate social performance?," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 591-609.
    42. Feng, Jingwen & Goodell, John W. & Shen, Dehua, 2022. "ESG rating and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 46(PB).
    43. El Hafdaoui, Hamza & Jelti, Faissal & Khallaayoun, Ahmed & Jamil, Abdelmajid & Ouazzani, Kamar, 2024. "Energy and environmental evaluation of alternative fuel vehicles in Maghreb countries," Innovation and Green Development, Elsevier, vol. 3(1).
    44. Xin‐Xin Zhao & Jun Wen & Xing‐Yun Zou & Quan‐jing Wang & Chun‐Ping Chang, 2023. "Strategies for the sustainable development of China in the post‐epidemic era," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 426-438, February.
    45. Pan, Yuxi & Zhang, Siqian & Zhang, Mengyue, 2024. "The impact of entrepreneurship of farmers on agriculture and rural economic growth: Innovation-driven perspective," Innovation and Green Development, Elsevier, vol. 3(1).
    46. Linn, Joshua & Muehlenbachs, Lucija, 2018. "The heterogeneous impacts of low natural gas prices on consumers and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 1-28.
    47. Chen, Fan & Linn, Scott C., 2017. "Investment and operating choice: Oil and natural gas futures prices and drilling activity," Energy Economics, Elsevier, vol. 66(C), pages 54-68.
    48. Zheng Guang‐Wen & Muntasir Murshed & Abu Bakkar Siddik & Md Shabbir Alam & Daniel Balsalobre‐Lorente & Haider Mahmood, 2023. "Achieving the objectives of the 2030 sustainable development goals agenda: Causalities between economic growth, environmental sustainability, financial development, and renewable energy consumption," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 680-697, April.
    49. Yang, Hao-Chang & Feng, Gen-Fu & Zhao, Xin Xin & Chang, Chun-Ping, 2022. "The impacts of energy insecurity on green innovation: A multi-country study," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 139-154.
    50. Cosimo Magazzino, 2012. "On the Relationship between Disaggregated Energy Production and GDP in Italy," Energy & Environment, , vol. 23(8), pages 1191-1207, December.
    51. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    52. Yi, Jinchao & Hou, Yilin & Zhang, Zach Ziye, 2023. "The impact of foreign direct investment (FDI) on China's manufacturing carbon emissions," Innovation and Green Development, Elsevier, vol. 2(4).
    53. Eliwa, Yasser & Aboud, Ahmed & Saleh, Ahmed, 2021. "ESG practices and the cost of debt: Evidence from EU countries," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 79(C).
    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. Liu, Yutong & Zheng, Mingbo & Shum, Wai Yan, 2024. "On the linkages between digital finance and real economy in China: A cointegration analysis," Innovation and Green Development, Elsevier, vol. 3(1).
    2. Niu, Bingcheng, 2024. "Government environmental protection expenditure and national ESG performance: Global evidence," Innovation and Green Development, Elsevier, vol. 3(2).
    3. Wang, Jun-Zhuo & Feng, Gen-Fu & Yin, Hua-Tang & Chang, Chun-Ping, 2023. "Toward sustainable development: Does the rising oil price stimulate innovation in climate change mitigation technologies?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 569-583.
    4. Zhou, Hao & Zheng, Mingbo, 2024. "Foreign direct investment and green innovation in China: An examination of quantile regression," Innovation and Green Development, Elsevier, vol. 3(3).
    5. Yan Ma & Gen‐Fu Feng & Chun‐Ping Chang, 2024. "From traditional innovation to green innovation: How an occurrence of natural disasters influences sustainable development?," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 2779-2796, June.
    6. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    7. Wen, Jun & Zhang, Sen & Chang, Chun-Ping & Anugrah, Donni Fajar & Affandi, Yoga, 2023. "Does climate vulnerability promote green investment under energy supply restriction?," Energy Economics, Elsevier, vol. 124(C).
    8. Han Long & Gen-Fu Feng & Chun-Ping Chang, 2023. "How does ESG performance promote corporate green innovation?," Economic Change and Restructuring, Springer, vol. 56(4), pages 2889-2913, August.
    9. Nazlioglu, Saban & Payne, James E. & Lee, Junsoo & Rayos-Velazquez, Marco & Karul, Cagin, 2021. "Convergence in OPEC carbon dioxide emissions: Evidence from new panel stationarity tests with factors and breaks," Economic Modelling, Elsevier, vol. 100(C).
    10. Han Long & Gen‐Fu Feng & Qiang Gong & Chun‐Ping Chang, 2023. "ESG performance and green innovation: An investigation based on quantile regression," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5102-5118, November.
    11. Heying Liu & Chan Lyu, 2022. "Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-20, September.
    12. Huang, Jun & Li, Yun & Han, Feifei, 2024. "Walk well and talk well: Impact of the consistency of ESG performance and disclosure on firms’ stock price crash risk," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1154-1174.
    13. Hao‐Chang Yang & Gen‐Fu Feng & Qiang Gong & Chun‐Ping Chang, 2023. "The impact of political competition on green innovation: A new insight into sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(5), pages 3692-3708, October.
    14. Mithilesh Gidage & Shilpa Bhide, 2025. "ESG and economic growth: Catalysts for achieving sustainable development goals in developing economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(2), pages 2060-2077, April.
    15. Mohy-ud-Din, Kamran, 2024. "ESG reporting, corporate green innovation and interaction role of board diversity: A new insight from US," Innovation and Green Development, Elsevier, vol. 3(4).
    16. Lai, Xiaobing & Zhang, Fan, 2022. "Can ESG certification help company get out of over-indebtedness? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    17. Wan, Guochao & Zhang, Weike & Li, Chao, 2024. "How does low-carbon city pilot policy catalyze companies toward ESG practices? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1593-1607.
    18. Yu, Haixu & Liang, Chuanyu & Liu, Zhaohua & Wang, He, 2023. "News-based ESG sentiment and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    19. Josep Carrion-i-Silvestre & Vicente German-Soto, 2009. "Panel data stochastic convergence analysis of the Mexican regions," Empirical Economics, Springer, vol. 37(2), pages 303-327, October.
    20. Ferreira, Cândida, 2020. "Globalisation and Economic Growth: A Panel Data Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(2), pages 187-236.

    More about this item

    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:wly:sustdv:v:32:y:2024:i:3:p:1940-1953. 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    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.