EXAMINING FIRMS’ ESG GRADES DETERMINANTS THROUGH FINANCIAL AND NON-FINANCIAL CHARACTERISTICS DURING COVID-19 IN KOREA*
- Authors
- Song, Min Kyung; Kim, Chungah; Kim, Sang Hyuck
- Issue Date
- Mar-2024
- Publisher
- Economic Research Institute of Chung-Ang University
- Keywords
- COVID-19 Pandemic; Economic Recession; ESG grades; Financial Characteristics; Korean Firms; Non-Financial Characteristics
- Citation
- Journal of Economic Development, v.49, no.1, pp 125 - 150
- Pages
- 26
- Journal Title
- Journal of Economic Development
- Volume
- 49
- Number
- 1
- Start Page
- 125
- End Page
- 150
- URI
- https://scholarworks.bwise.kr/gachon/handle/2020.sw.gachon/91077
- DOI
- 10.35866/caujed.2024.49.1.007
- ISSN
- 0254-8372
- Abstract
- This study employs Ordinary Least Squares (OLS) and quantile regression analyses to examine the determinants of Environmental, Social, and Governance (ESG) grades based on financial and non-financial characteristics of Korean companies amidst the global economic recession triggered by the COVID-19 pandemic. We investigate whether different determinants exist for varying levels of ESG grades (lower, middle, and higher groups). Analyzing cross-sectional data from 660 Korean companies, we find that both financial and non-financial characteristics significantly impacted ESG grades during the pandemic. Key determinants include firm value, size, and cash liquidity in financial characteristics, while firm age and industry type are vital non-financial determinants. Furthermore, the results highlight distinctions among ESG sub-dimensions, revealing that financial attributes predominantly influence environmental grades, whereas both financial and non-financial aspects shape social and governance grades. The findings elucidate ESG grade determinants and their differential relationships with various company characteristics during the challenging COVID-19 period in Korea. © (2023), (Economic Research Institute of Chung-Ang University). All Rights Reserved.
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