Anatoli Colicev - On campus - Room X120 - Exed building

Marketing Research Seminar

Speaker: 
Anatoli Colicev
Chair in Marketing, Strategy and Analytics
University of Liverpool

Title:
How ESG Reduces Risk: The Role of Consumers and Institutional Investors

Abstract:
Practitioners regard firms’ environmental, social, and governance (ESG) performances as a crucial risk management practice. However, no empirical evidence has yet linked ESG performances to firm risk through different stakeholders. Drawing on stakeholder theory, the authors develop a conceptual framework that posits (1) asymmetric relationships between individual E, S, and G performances and customer-based brand equity (CBBE) and institutional investor ownership (IIO), (2) the moderating role of competitive intensity in these relationships, and (3) mediating roles of CBBE and IIO in the relationships between E, S, and G performances and firms’ idiosyncratic risk. Using quarterly data from 416 firms spanning 2012–2020, the authors find that CBBE and IIO indeed mediate the associations between ESG performance and idiosyncratic risk. While E performance has a positive and G performance a negative association with CBBE, E and S performances have a negative and G performance a positive association with IIO. Competitive intensity strengthens the association between S performance and CBBE and the association between E performance and IIO but weakens the association between G performance and both CBBE and IIO. The findings imply firms should carefully navigate the trade-offs associated with relationships between E, S, and G performances and multiple stakeholders.