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Market Structure, ESG Performance and Corporate Efficiency: Insights from Brazilian Publicly Traded Companies
Moskovics, P. Fernandes Wanke, P. Tan, Yong Gerged, A.
Moskovics, P.
Fernandes Wanke, P.
Tan, Yong
Gerged, A.
Publication Date
2023
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(c) 2023 The Authors. This is an Open Access article distributed under the Creative Commons CC-BY license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
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openAccess
Accepted for publication
03/06/2023
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Abstract
Using a sample of Brazilian listed companies during 2010-2019, the study investigates the endogeneity and the directional cause-effect relationship between firm efficiency, market structure and firms’ ESG performance under a Stochastic Structural Relationship Programming (SSRP) model. Also, comprehensive market structure indicators are used. The efficiency is estimated under a two-stage network Data Envelopment Analysis (NDEA) model. Our empirical evidence is threefold. First, our evidence indicates that firms with better environmental performance are more efficient, whereas lower ESG performance and poorer corporate governance practices are associated with a higher level of efficiency. Second, our findings suggest that market structure measures (i.e., competition and market power) have heterogeneous impacts on various ESG indexes. Specifically, higher market competition is associated with better overall ESG performance and environmental performance but worse corporate governance performance, although market power can only enhance the environmental and governance performance of firms. Third, the two market structure proxies employed in this study are significantly attributed to firm efficiency. Our findings provide practical implications for various stakeholders and suggest avenues for future studies that can build on our evidence.
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Published version
Citation
Moskovics P, Fernandes Wanke P, Tan Y et al (2023) Market Structure, ESG Performance and Corporate Efficiency: Insights from Brazilian Publicly Traded Companies. Business Strategy and the Environment. Accepted for publication.
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Article