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ESG performance and economic growth: a panel co-integration analysis

Author

Listed:
  • Marc-Arthur Diaye

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Sy-Hoa Ho
  • Rim Oueghlissi

Abstract

How important a good ESG performance is for GDP per capita? In this paper we examine the economic effect of environmental, social and governance (ESG) performance in 29 OECD countries over the 1996–2014 period, using panel cointegration techniques. The application of cointegration methodology allows distinguishing between long run and short run effects. We find that, while there is a positive relationship between ESG and GDP per capita in the long run, such relationship does not exist in the short run. However when allowing for heterogeneity in the short term dynamics (Pooled Mean Group), two countries (Iceland and South Korea) benefit in the short run (w.r.t. GDP per capita) from their ESG performance.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marc-Arthur Diaye & Sy-Hoa Ho & Rim Oueghlissi, 2022. "ESG performance and economic growth: a panel co-integration analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03897938, HAL.
    • Handle: RePEc:hal:cesptp:hal-03897938
    DOI: 10.1007/s10663-021-09508-7
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    Cited by:

    1. Angelidis, Timotheos & Michairinas, Athanasios & Sakkas, Athanasios, 2024. "World ESG performance and economic activity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 93(C).
    2. Jiazhen Wang & Jing Yu & Rui Zhong, 2023. "Country environmental, social and governance performance and economic growth: The international evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 3911-3941, December.
    3. Qureshi, Fiza & Qureshi, Saba & Ismail, Izlin & Yarovaya, Larisa, 2025. "Unlocking economic insights: ESG integration, market dynamics and sustainable transitions," Energy Economics, Elsevier, vol. 145(C).
    4. Naudé, Wim, 2024. "Entrepreneurship Is Dangerously Obsessed with Growth and Incompatible with Current Visions of a Post-growth Society," IZA Discussion Papers 17158, Institute of Labor Economics (IZA).
    5. Liu, Xue-Ying & Zhao, Xin-Xin & Ma, Kun & Sharma, Susan Sunila, 2024. "The impact of financial sanctions on ESG performance of target countries," Pacific-Basin Finance Journal, Elsevier, vol. 87(C).
    6. Farea Alharbi, 2024. "The Impact of ESG Reforms on Economic Growth in GCC Countries: The Role of Financial Development," Sustainability, MDPI, vol. 16(24), pages 1-15, December.
    7. Víctor Hugo Fernández-Bedoya & Monica Elisa Meneses-La-Riva & Josefina Amanda Suyo-Vega & Johanna de Jesús Stephanie Gago-Chávez, 2023. "Entrepreneurship Research in Times of COVID-19: Experiences from South America," Sustainability, MDPI, vol. 15(7), pages 1-17, March.
    8. Liu, Xukang & Ma, Chao-Qun & Ren, Yi-Shuai, 2025. "ESG reactions to fintech: The role of cross-border capital flows," Research in International Business and Finance, Elsevier, vol. 76(C).
    9. Jackson Juatco Tan & Virginia Ramirez Arceo, 2024. "Women driving Philippine entrepreneurship: Social and governance issues as mediated by economic development," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 14(1), pages 1-13, December.
    10. Jin Wang & Zihan Hong & Hai Long, 2023. "Digital Transformation Empowers ESG Performance in the Manufacturing Industry: From ESG to DESG," SAGE Open, , vol. 13(4), pages 21582440231, October.
    11. Kadarisman Hidayat & Diana Zuhroh, 2023. "The Impact of Environmental, Social and Governance, Sustainable Financial Performance, Ownership Structure, and Composition of Company Directors on Tax Avoidance: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 311-320, November.
    12. Zhu, Shiqian & Tian, Haowen & Wang, Chenyu, 2024. "Economic indicator accuracy and corporate ESG performance," Economics Letters, Elsevier, vol. 243(C).
    13. Adil Haniev, 2024. "Intangible Assets and US Stock Returns: An analysis using the Index Method, Panel Regression, and Machine Learning," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(3), pages 833-854.

    More about this item

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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