ESG, innovation, and economic growth: an empirical evidence
Studies in Economics and Finance
ISSN: 1086-7376
Article publication date: 28 May 2024
Issue publication date: 23 July 2024
Abstract
Purpose
This paper aims to examine the relationships among environmental, social and governance (ESG) practices, innovation and economic growth in five Asian countries from 1990 to 2020.
Design/methodology/approach
The study innovatively constructed the ESG index at the country level by using frequency statistics on text mining and factor analysis for each country over time. In addition, this study used the autoregressive distributed lag method to establish a long-term relationship.
Findings
The authors discovered that ESG practices among corporate entities significantly impact economic growth in Malaysia, the Philippines and Singapore. Specifically, the environmental component positively affects the growth of Malaysia, Thailand and the Philippines, while the governance components of ESG contribute to Thailand’s economic growth. The authors also discovered that innovation improves countries’ economic growth, thus offering policy insights into promoting ESG practices and stimulating the ecosystem for innovation.
Originality/value
The paper fills the gap left in previous inconclusive findings on the association between ESG practices and country growth.
Keywords
Acknowledgements
This research was supported by the Ministry of Higher Education of Malaysia (MoHE) through the Fundamental Research Grant Scheme (FRGS/1/2020/SS0/UUM/02/25).
Declaration of generative AI and AI-assisted technologies in the writing process: During the preparation of this work, the author(s) used ChatGPT to improve the language. After using this tool/service, the author(s) reviewed and edited the content as needed and take(s) full responsibility for the content of the publication.
Funding: This research was supported by Ministry of Higher Education (MoHE) of Malaysia through Fundamental Research Grant Scheme (FRGS/1/2020/SS0/UUM/02/25).
Data availability statement: The data sets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.
Ethical approval: Not applicable.
Consent to participate: Not applicable.
Consent to publish: Not applicable.
Competing interests: The authors declare that they have no competing interests.
Availability of data and materials: The data sets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Citation
Mohd Daud, S.N., Ghazali, N.S. and Mohammad Ismail, N.H. (2024), "ESG, innovation, and economic growth: an empirical evidence", Studies in Economics and Finance, Vol. 41 No. 4, pp. 845-870. https://doi.org/10.1108/SEF-11-2023-0692
Publisher
:Emerald Publishing Limited
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