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324347

The Moderating Effect of Investor Sentiment on the Relationship between ESG Performance and Future Financial Performance: An Empirical Study from Egypt

Article

Last updated: 24 Dec 2024

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Tags

المحاسبة

Abstract

This paper examines the role of investor sentiment in influencing the relationship between Environmental, Social, and Governance Performance (ESG) and future financial performance (FFP). Using a sample of EGX 100 listed companies from 2014 to 2020, we find a positive relationship between ESG performance and FFP.We also find that firm-specific investor sentiment (F-SENT) is negatively associated with overall ESG performance, its individual categories, and FFP. While ESG performance generally leads to positive FFP, firm-specific investor sentiment weakens this relationship. This effect is not significant for overall ESG performance, but the governance category does show a significant negative relationship. The findings offer a detailed insight into the complex interactions between investors, ESG, and firm performance, specifically in the Egyptian market. These insights can guide managers and policymakers in decision-making processes, allowing them to craft strategies that align with investor behavior. This study enhances our understanding of how firm-specific investor sentiment impacts ESG performance and FFP, contributing novel empirical insights to the relationship between ESG and FFP.

DOI

10.21608/jces.2023.324347

Keywords

Investor Sentiment, future financial performance, ESG performance

Authors

First Name

Soad

Last Name

Moussa Tantawy

MiddleName

-

Affiliation

Assistant Professor Accounting Department, Faculty of Commerce, Cairo University

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City

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Orcid

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Volume

14

Article Issue

3

Related Issue

43914

Issue Date

2023-07-01

Receive Date

2023-07-01

Publish Date

2023-07-01

Page Start

521

Page End

569

Print ISSN

2090-3782

Link

https://jces.journals.ekb.eg/article_324347.html

Detail API

https://jces.journals.ekb.eg/service?article_code=324347

Order

70

Type

المقالة الأصلية

Type Code

986

Publication Type

Journal

Publication Title

المجلة العلمية للدراسات التجارية والبيئية

Publication Link

https://jces.journals.ekb.eg/

MainTitle

The Moderating Effect of Investor Sentiment on the Relationship between ESG Performance and Future Financial Performance: An Empirical Study from Egypt

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Type

Article

Created At

24 Dec 2024