The Relation between ESG Performance and Financial Performance: Evidence from Healthcare Firms

Jiyun Deng

doi:10.54097/1ceqex46

Authors

Jiyun Deng

DOI:

https://doi.org/10.54097/1ceqex46

Keywords:

ESG performance, financial performance, healthcare firms, regression analysis.

Abstract

Today, ESG, as a critical investment consideration, is receiving more and more attention from investors and entrepreneurs. They seek to improve their investment decisions by understanding the relationship between ESG and business performance. Many investors are looking to optimize their investment strategies, and entrepreneurs are trying to attract more investors by improving their companies’ environmental, social and governance performance to increase profitability. This study aims to help investors make more effective investment decisions and give managers more valuable, profitable growth solutions. Based on the two-stage least squares analysis and curve fitting analysis of the data of 48 sample companies, the conclusions are as follows: (1) The direct impact of ESG performance and its different forms on the financial results of enterprises is relatively limited, and this impact is often not significant in statistical data. (2) Changes in corporate finance are not only affected by ESG performance but may also be affected by other factors that have not been fully considered. (3) The relationship between ESG performance and corporate financial performance may not be linear but involves more complex nonlinear variable relationships. Future studies should also try to use another nonlinear model to reveal more deeply the complex interactions between variables. Finally, given the small sample size (N=46), increasing the sample size is also an important direction for future research.

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