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The purpose of this paper is to investigate the relationship between a company’s environmental, social and governance (ESG) performance and its financial performance. This paper also investigates the relationship between ESG performance and a company’s market valuation. This paper provides convincing empirical evidence that delivering superior ESG performance pays off financially.

The financial data and ESG scores of 150 publicly traded companies listed in the Standard and Poor’s 500 index for 2017–2020, comprising 5,750 observations, were collected. STATA was used to run a fixed-effect regression and a weighted least squares model to analyze the panel data.

The results of the empirical analysis suggest that companies with superior ESG performance perform better financially and are valued higher in the market compared to their industry peers. The ESG rating score impacts both return-on-capital-employed as a proxy for financial performance and Tobin’s Q as a proxy for the market valuation of a company.

This study contributes to the existing research on ESG performance and financial performance relationship by providing empirical evidence to resolve confusion in the existing literature caused by contradictory evidence. Taking advantage of worldwide crisis caused by the COVID-19 pandemic, this study shows that a positive relationship between ESG performance and a company’s market valuation holds even during times of unexpected crises. Further, this study contributes to business practitioners’ knowledge by showing that ESG aspects constitute highly relevant non-financial information that impact the market’s perception of a company and that investing in sustainability positively impacts a company’s bottom line.

This paper examines the effect of ESG ratings and its dimensions (environmental, social and governance) on the financial performance of JSE-listed firms included in FTSE/JSE Responsible Investment Index.

The paper employs panel data covering 40 JSE-listed firms included in FTSE/JSE Responsible Investment Index between 2015 and 2019. The paper employs the two-stage least squares (2SLS) instrumental variable regression technique to estimate the effect of ESG ratings and its dimensions (environmental, social and governance) on both accounting- and market-based performance indicators.

The results of the two-stage least squares instrumental estimation analysis reveal that investment in ESG initiatives improves both accounting- and market-based indicators of financial performance. Of the ESG pillars, the paper finds environmental initiatives improves firms' financial bottom line and market performance, while a firm's social and governance practices are observed to have no effect on a firm's accounting and market performance measures.

The insights from this study proffers policy implications for firms' management, investors and regulatory authorities.

As far as the authors are concerned, this paper presents the first empirical analysis on the contribution of ESG ratings on financial performance in South Africa.

The authors examine the effect of split environmental, social and governance (ESG) ratings on information asymmetry, corporate value and trading behavior. The authors test the risk-based hypothesis and the optimism-bias hypothesis on the relationship between diverging opinions and future stock prices. The authors results show that split ESG ratings is positively related to idiosyncratic volatility, an alternative measure for information asymmetry. Further, the negative effect of split ESG ratings on cumulative abnormal return under short-selling constraints is consistent with the optimism bias hypothesis. The authors find a negative relationship between split ESG ratings and the net purchase ratio (NPR) of pension funds. Considering that the NPR is a direct measure of net demand, ESG disagreement may hinder socially responsible investing (SRI) in a firm. This study directly demonstrates the negative effect of ESG disagreement on firm value and investment by Korea's National Pension Service (NPS). The results offer valuable insights into policymakers, as the wide divergence in ESG ratings requires urgent attention to expand SRI.

The purpose of this paper is to determine whether different scales and ways to collect reviews and ratings found on online travel agencies (OTAs) can affect hotels, and whether hotels obtain the same or different evaluations.

Hotel ratings from five OTAs in four European markets were collected and compared in pairs. An initial comparison was made with the hotel scores of each OTA to show what a typical user would see. Then, a rescaled score (0-10) was used to compare all the OTA scales appropriately and to distinguish between what customers observe and what the reality is.

The results reveal that Booking.com that uses a scale (2.5-10) and Agoda with a scale (2-10) seem to give higher rating scores than Atrapalo (1-10), Travel Republic (0-10) and hotel reservation service (1-10). However, when the scores are rescaled (0-10), the worst ratings are found on Booking.com followed by Agoda.

OTAs should include, next to the scores, the scale used to rate hotels so as to provide users with better and clearer information. Moreover, rating questionnaires should match the verbal denominations with their numerical values to avoid biased ratings.

OTAs and hotel managers are losing information provided by customers because customers are not aware of the scale when rating hotels. Moreover, hotel ratings are used by potential customers to obtain a clearer image of an establishment. However, if some hotels are being overrated by some scales, customers might have higher expectations, which may not be met.

The unique rating scales of Booking.com and Agoda provide additional insights into their hotel evaluations, which seem to be apparently higher when in fact they are not.

在线旅行评论评分量表及其对酒店得分和竞争力的影响

摘要

这项研究旨在研究在线旅行社（OTA）上评论和评级的不同量表和方式是否会影响酒店获得的评估。

本研究收集并比较了来自四个欧洲市场中五个OTA的酒店等级数据。研究首先对每个OTA的酒店得分进行了比较, 以显示一般用户会看到的内容。然后研究使用重新缩放的得分（0-10）来恰当地比较所有OTA的酒店等级, 并区分顾客观察到的内容和现实。

结果显示, Booking.com使用的量表（2.5-10）和Agoda的量表（2-10）, 似乎高于Atrapalo（1-10）, Travel Republic（0-10）和 hotel reservation service （1-10）的评分。但是, 当分数重新调整为（0-10）时, 最差的评分是在Booking.com上, 其次是Agoda。

OTA应在评分旁边注明用于对酒店进行评分的量表, 以便为用户提供更好, 更清晰的信息。此外, 评级问卷应使评价描述与其数值相匹配, 以避免评级出现偏差。

OTA和酒店经理正在丢失客户所提供的信息, 因为客户在对酒店进行评级时并不了解其使用的量表。此外, 潜在客户使用酒店评级来获得更清晰的企业形象。但是, 如果某些酒店被某些网站的评级量表高估, 那么客户可能会有偏高的期望, 而这些期望可能无法被满足。

Booking.com和Agoda的独特评分等级标准为酒店提供了更多见解, 而实际上酒店的情况可能并非如此。

Las escalas de calificación de las opiniones de los viajes online y sus efectos en la valoración y competitividad de los hoteles.

El objetivo de esta investigación es determinar si las diferentes escalas y formas de recopilar opiniones y valoraciones de las Agencias de Viajes Online (OTAs), pueden afectar a si los hoteles tienen las mismas o distintas calificaciones.

Las calificaciones de hoteles de cinco OTAs en cuatro mercados europeos, se recopilaron y compararon por pares. Se realizó una comparación inicial con las puntuaciones de los hoteles de cada OTA, para mostrar lo que vería un usuario típico. Luego, se utilizó una puntuación de reescalado (0-10), para comparar todas las escalas de las OTAs de manera apropiada y así poder diferenciar entre lo que los clientes observan y lo que es en realidad.

Los resultados revelan que Booking.com, que utiliza una escala (2.5-10) y Agoda con una escala (2-10), parecen puntuar con calificaciones más altas que Atrapalo (1-10), Travel Republic (0-10) y hotel reservation service (1-10). Sin embargo, cuando se vuelven a escalar las puntuaciones (0-10), las peores calificaciones se encuentran en Booking.com, seguida de Agoda.

Las OTAs deben incluir, junto a las puntuaciones, la escala utilizada para calificar los hoteles a fin de proporcionar a los usuarios una información mayor y más clara. Además, los cuestionarios de calificación deben hacer coincidir las denominaciones verbales con sus valores numéricos para evitar calificaciones sesgadas.

Por un lado las OTAs y los gerentes de hoteles, están perdiendo información proporcionada por los clientes, porque los clientes no son conscientes del tipo de escala utilizada cuando califican los hoteles. Por otro lado, los clientes potenciales utilizan las calificaciones de los hoteles para obtener una imagen más clara de un establecimiento. Por lo que en muchos casos, los clientes pueden tener expectativas más altas, que pueden no cumplirse, si los hoteles están siendo sobrevalorados por algunas escalas.

Las escalas de calificación únicas de Booking.com y Agoda, brindan información adicional sobre las evaluaciones de sus hoteles que parecen ser aparentemente más altas cuando en realidad no lo son.

Using Schein’s Descriptive Index (SDI), this paper aims to first examine gender role stereotypes and requisite managerial characteristics among Irish business students over a 10-year period. Then, the paper investigates whether there have been changes in gender role stereotypes during this period and subsequently unpack the reasons behind any changes recorded.

In total, 1,124 students from the same business student population rated men, women and managers in general, using SDI. Data was collected first during the academic year 2008–2009 and again in 2018–2019 to determine stability or change in gender role stereotypes and requisite managerial characteristics. Intraclass correlation coefficients scores were computed to determine the relationship between gender and requisite managerial characteristics and identify differences and similarities between the two samples. To explore the content of gender stereotypes, an examination of the specific descriptive items was conducted by performing a factorial analysis using Duncan’s Multiple Range Test. Finally, the authors adapted the scales developed by Duehr and Bono (2006) to determine whether broad gender stereotypic characteristics with respect to communal and agentic, attributed to men, women and managers, differ by sample.

The overall findings indicate changes in the extent of gender role stereotyping of the managerial role among the male cohorts studied. The subsequent analysis of the descriptive items identified that the change among the male cohort is due to the levels of agency they perceive women to now possess.

The authors contribute to the literature on both gendered and managerial stereotypes by showing changes in the pro-male stereotype of the managerial role and contribute to the existing debate on a shift towards a more androgynous view of leadership.

These findings help understand the content of gender role stereotypes that recent graduates bring with them to their first job post-graduation. The observed changes in the level of agency ascribed to women by their male counterparts could prove to be an important step forward for women’s advancement to managerial positions.

The findings indicate that both male and female cohorts in Sample 2 perceived men and women in general to possess the same levels of communal and agentic traits as their managerial counterparts.

The purpose of this study is to develop a method to assess social performance. Traditionally, environment, social and governance (ESG) rating providers use subjectively weighted arithmetic averages to combine a set of social performance (SP) indicators into one single rating. To overcome this problem, this study investigates the preconditions for a new methodology for rating the SP component of the ESG by applying machine learning (ML) and artificial intelligence (AI) anchored to social controversies.

This study proposes the use of a data-driven rating methodology that derives the relative importance of SP features from their contribution to the prediction of social controversies. The authors use the proposed methodology to solve the weighting problem with overall ESG ratings and further investigate whether prediction is possible.

The authors find that ML models are able to predict controversies with high predictive performance and validity. The findings indicate that the weighting problem with the ESG ratings can be addressed with a data-driven approach. The decisive prerequisite, however, for the proposed rating methodology is that social controversies are predicted by a broad set of SP indicators. The results also suggest that predictively valid ratings can be developed with this ML-based AI method.

This study offers practical solutions to ESG rating problems that have implications for investors, ESG raters and socially responsible investments.

The proposed ML-based AI method can help to achieve better ESG ratings, which will in turn help to improve SP, which has implications for organizations and societies through sustainable development.

To the best of the authors’ knowledge, this research is one of the first studies that offers a unique method to address the ESG rating problem and improve sustainability by focusing on SP indicators.

The credit ratings issued by the Big 3 ratings agencies are inaccurate and slow to respond to market changes. This paper aims to develop a rigorous, transparent and robust credit assessment and rating scheme for sovereigns.

This paper develops a regression-based model using credit default swap (CDS) data, and data on financial and macroeconomic variables to estimate sovereign CDS spreads. Using these spreads, the default probabilities of sovereigns can be estimated. The new ratings scheme is then used in conjunction with these default probabilities to assign credit ratings to sovereigns.

The developed model accurately estimates CDS spreads (based on RMSE values). Credit ratings issued retrospectively using the new scheme reflect reality better.

This paper reveals that both macroeconomic and financial factors affect both systemic and idiosyncratic risks for sovereigns.

The developed credit assessment and ratings scheme can be used to evaluate the creditworthiness of sovereigns and subsequently assign robust credit ratings.

The transparency and rigor of the new scheme will result in better and trustworthy indications of a sovereign’s financial health. Investors and monetary authorities can make better informed decisions. The episodes that occurred during the debt crisis could be avoided.

This paper uses both financial and macroeconomic data to estimate CDS spreads and demonstrates that both financial and macroeconomic factors affect sovereign systemic and idiosyncratic risk. The proposed credit assessment and ratings schemes could supplement or potentially replace the credit ratings issued by the Big 3 ratings agencies.

To elaborate the nature of fact-checking in the domain of political information by examining how fact-checkers assess the validity of claims concerning the Russo-Ukrainian conflict and how they support their assessments by drawing on evidence acquired from diverse sources of information.

Descriptive quantitative and qualitative content analysis of 128 reports written by the fact-checkers of Snopes – an established fact-checking organisation – during the period of 24 February 2022 – 28 June, 2023. For the analysis, nine evaluation grounds were identified, most of them inductively from the empirical material. It was examined how the fact-checkers employed such grounds while assessing the validity of claims and how the assessments were bolstered by evidence acquired from information sources such as newspapers.

Of the 128 reports, the share of assessments indicative of the invalidity of the claims was 54.7%, while the share of positive ratings was 26.7%. The share of mixed assessments was 15.6%. In the fact-checking, two evaluation grounds, that is, the correctness of information and verifiability of an event presented in a claim formed the basis for the assessment. Depending on the topic of the claim, grounds such as temporal and spatial compatibility, as well as comparison by similarity and difference occupied a central role. Most popular sources of information offering evidence for the assessments include statements of government representatives, videos and photographs shared in social media, newspapers and television programmes.

As the study concentrated on fact-checking dealing with political information about a specific issue, the findings cannot be extended to concern the fact-checking practices in other contexts.

The study is among the first to characterise how fact-checkers employ evaluation grounds of diverse kind while assessing the validity of political information.

This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken as the area of focus due to its leadership role in the volume of global Sharīʿah-compliant assets.

The objectives of the Islamic financial system (IFS) are selected as the basis for ratings. A range of performance indicators (leading to achievement of the objectives) is grouped into four broader categories and used in the study to allocate scores with a sum total of 100. Special considerations – including the amount of resources required in performing an activity, suitability of prevailing business conditions, the degree of compulsion/discretion in performing a task and linkage with the essence of the IFS – were taken into account in the allocation of scores.

This study groups multiple performance measures into four categories, including portfolio construction (deposits mechanism, participatory and asset-based modes of financing), access to finance (service to the less-privileged and sector screening), reputation (disclosures and stakeholders’ survey) and Sharīʿah governance (Sharīʿah supervision and controls, charitable operations, human resources, product development and organization). The Portfolio, Audit, Reputation and System (PARS) rating system is then developed.

A Sharīʿah-compliance rating system is helpful in measuring the progress towards goal achievement of the IFS and in gaining stakeholders’ trust. It is also important for Sharīʿah boards and regulators in policy formulation, for management in addressing weaknesses and taking corrective measures and potentially for standard-setting bodies.

This study presents a comprehensive quantitative Sharīʿah-compliance rating mechanism, taking into consideration the objectives of the IFS – equitable distribution of wealth and financial stability, in addition to Sharīʿah-compliance in operations. Development of Sharīʿah-compliance quality ratings for Islamic banking is essential to gain customers’ trust; the suggested methodology is thus a contribution to the literature on Islamic finance.

The purpose of this paper is to determine the impact of corporate investments in corporate social responsibility (CSR), measured by the environmental, social and government (ESG) rating, on the market valuation of a firm's stocks and to explain the regional differences in the degree of this influence.

The empirical study uses linear and non-linear panel regression models for a panel sample of 951 firms listed in Asia, North America and Europe operating in innovative industries.

The CSR score was found to be significant in terms of stock excess return on the regional level. However, this finding cannot be extrapolated to the global scale. ESG rating is priced by the European and North American markets negatively, while in the Asian market, it is positive. This penalty (negative influence) is greater than the reward for one point increase in ESG rating.

The results of this empirical study could be used by firms' managers to adjust strategies aimed at stock value growth and by investors to select an investment strategy to maximize return.

The impact of investments in CSR on stock excess return over a defined benchmark is assessed. The study reveals regional differences in the impact of CSR investment using a sample of Asian, European and North American firms. The authors apply a more advanced lagged CSR performance (d.ESG) assessment based on the methodology of Zhang and Rajagopalan (2010).