Title: Extending the impact of ESG on firm performance: the moderation effects of ESG controversies and R&D investment

Authors: Thi-Quynh Duong; Yu-Chuan Huang

Addresses: Department of Business and Administration, Southern Taiwan University of Science and Technology, Tainan, 71005, Taiwan ' Department of International Business, Southern Taiwan University of Science and Technology, Tainan, 71005, Taiwan

Abstract: This research is to explore the interaction between 3 pillars: environmental, social, and governance (ESG) activities and corporate value in the Organization for Economic Co-operation and Development (OECD) countries. Furthermore, exploring two moderating effects of ESG controversies and research and development (R&D) expenditure between ESG and the performance of firms would be conducted based on stakeholder and shareholder theory. To examine the hypotheses, the researchers applied multiple regression analysis and used 2244 valid samples over the period 2018-2021. The outcomes illustrate that the actions of ESG have a negative impact on value firms. Besides, ESG controversies positively govern and R&D spending negatively moderate the correlation between ESG reports and the value of firms. This research not only systematically integrates two moderation variables into the research model, neglecting earlier studies, but also helps to enrich fundamental works of literature, reveal the context of ESG and firm performance research, and expand the boundaries.

Keywords: ESG; environmental; social; and governance; firm performance; ESG controversies; R&D investment; OECD; Organization for Economic Co-operation and Development.

DOI: 10.1504/IJISD.2025.144831

International Journal of Innovation and Sustainable Development, 2025 Vol.19 No.2, pp.224 - 241

Received: 30 Mar 2023
Accepted: 25 Oct 2023
Published online: 04 Mar 2025 *

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