World ESG Performance and Economic Activity

50 Pages Posted: 31 May 2023 Last revised: 29 Nov 2023

See all articles by Timotheos Angelidis

Timotheos Angelidis

Independent

Athanasios Michairinas

Athens University of Economics and Business - Department of Accounting and Finance

Athanasios Sakkas

Athens University of Economics and Business - Department of Accounting and Finance

Date Written: November 23, 2023

Abstract

Using data from forty-six developed and emerging markets, we show that a world-based environmental, social, and governance index (ESGI) provides useful information about future economic activity in- and out-of-sample. A relatively high increase in ESGI predicts a decrease (increase) in future economic activity in the short (long) term. We document that the environmental, social, and governance components of ESGI contribute to the predictability of economic activity. Our results have significant implications for policymakers to advise firms to adopt better ESG practices.

Keywords: Forecasting; Real Economic Activity; ESG

JEL Classification: G15; E37

Suggested Citation

Angelidis, Timotheos and Michairinas, Athanasios and Sakkas, Athanasios, World ESG Performance and Economic Activity (November 23, 2023). Available at SSRN: https://ssrn.com/abstract=4463394

Timotheos Angelidis

Independent

Athanasios Michairinas

Athens University of Economics and Business - Department of Accounting and Finance ( email )

Athanasios Sakkas (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

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