The Moderating Effect of Investor Sentiment on the Relationship between ESG Performance and Future Financial Performance: An Empirical Study from Egypt | ||
| المجلة العلمية للدراسات التجارية والبيئية | ||
| Article 70, Volume 14, Issue 3, July 2023, Pages 2869-2917 PDF (647.25 K) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/jces.2023.324347 | ||
| Author | ||
| Soad Moussa Tantawy* | ||
| Assistant Professor Accounting Department, Faculty of Commerce, Cairo University | ||
| Abstract | ||
| This paper examines the role of investor sentiment in influencing the relationship between Environmental, Social, and Governance Performance (ESG) and future financial performance (FFP). Using a sample of EGX 100 listed companies from 2014 to 2020, we find a positive relationship between ESG performance and FFP.We also find that firm-specific investor sentiment (F-SENT) is negatively associated with overall ESG performance, its individual categories, and FFP. While ESG performance generally leads to positive FFP, firm-specific investor sentiment weakens this relationship. This effect is not significant for overall ESG performance, but the governance category does show a significant negative relationship. The findings offer a detailed insight into the complex interactions between investors, ESG, and firm performance, specifically in the Egyptian market. These insights can guide managers and policymakers in decision-making processes, allowing them to craft strategies that align with investor behavior. This study enhances our understanding of how firm-specific investor sentiment impacts ESG performance and FFP, contributing novel empirical insights to the relationship between ESG and FFP. | ||
| Keywords | ||
| Investor sentiment; future financial performance; ESG performance | ||
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