Competition and ESG practices in emerging markets: Evidence from a difference-in-differences model

By H. Martins. Finance Research Letters, 2021

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Abstract This paper investigates how competition affects firms' environmental, social, and governance (ESG) practices in 22 emerging markets, using a sample of 6,906 firm–year observations from 2011 to 2019. Using a difference-in-differences technique and matched samples with a treated and a control group, I explore exogenous variation in the competitive environment of one country, Brazil, to assess the competition´s causal effect on ESG. The results suggest that firms adjust ESG practices negatively after a shock in competition, contrasting with previous results from developed economies.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/5bc809d9e005e19a9a33c28a72da349ea2fbcc18