Does ESG Improve Short-Term Efficiency? Evidence from Turkish Manufacturing Firms
DOI:
https://doi.org/10.5281/zenodo.20563238Schlagworte:
ESG, Operational Efficiency, Capacity Utilization, Short-Term Effects, Turkish Manufacturing SectorAbstract
This paper investigates whether Environmental, Social, and Governance (ESG) performance enhances firm-level efficiency in the short term, focusing on Turkish manufacturing firms. Using panel data from 16 firms listed on Borsa Istanbul over the period 2019-2023, the analysis employs fixed-effects models with robust estimators to account for heterogeneity and potential dependence structures. The findings indicate that ESG performance is not statistically significant in explaining operational efficiency, innovation, or firm growth in the short run. While the contemporaneous effect on production efficiency is weak and sensitive to estimation methods, the evidence for lagged ESG effects remains limited and sensitive to estimation methods. These results suggest that ESG does not generate robust short-term performance gains but may operate through longer-term and context-dependent mechanisms. Overall, the study highlights the importance of time horizon and methodological choices in evaluating ESG-performance relations.
Literaturhinweise
Agnese, P., Carè, R., Cerciello, M., & Taddeo, S. (2025). Reconsidering the impact of environmental, social and governance practices on firm profitability. Management Decision, 63(1), 25-48. https://doi.org/10.1108/MD-10-2023-1943
Albuquerque, R., Koskinen, Y., Yang, S., & Zhang, C. (2020). Resiliency of environmental and social stocks: An analysis of the exogenous COVID-19 market crash. The Review of Corporate Finance Studies, 9(3), 593-621. https://doi.org/10.1093/rcfs/cfaa011
Arellano, M. (1987). Computing robust standard errors for within-groups estimators. Oxford Bulletin of Economics and Statistics, 49(4), 431-434. https://doi.org/10.1111/j.1468-0084.1987.mp49004006.x
Arsenopoulou, M., Nerantzidis, M., Lazarides, T., & Diakogiannis, I. (2025). The impact of ESG practices on firms’ production efficiency: A nonparametric frontier analysis. Society and Business Review, 20(4), 721-741. https://doi.org/10.1108/SBR-07-2024-0250
Atz, U., Van Holt, T., Liu, Z. Z., & Bruno, C. C. (2023). Does sustainability generate better financial performance? Review, meta-analysis, and propositions. Journal of Sustainable Finance & Investment, 13(1), 802-825. https://doi.org/10.1080/20430795.2022.2106934
Baltagi, B. H. (2021). Econometric analysis of panel data (6th ed.). Springer. https://doi.org/10.1007/978-3-030-53953-5
Bhandari, A., & Javakhadze, D. (2017). Corporate social responsibility and capital allocation efficiency. Journal of Corporate Finance, 43, 354-377. https://doi.org/10.1016/j.jcorpfin.2017.01.012
Blach, J., Gorzeń-Mitka, I., & Lipowicz, M. (2025). Scientific mapping of environmental, social, and governance (ESG) research from the perspective of stakeholders: A content analysis study. Journal of Entrepreneurship, Management and Innovation, 21(4), 75-102. https://www.jemi.edu.pl/uploadedFiles/file/all-issues/vol21/issue4/JEMI_Vol21_Issue4_2025.pdf
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1-23. https://doi.org/10.1002/smj.2131
da Cunha, Í. G. F., Policarpo, R. V. S., de Oliveira, P. C. S., Abdala, E. C., & Rebelatto, D. A. do N. (2025). A systematic review of ESG indicators and corporate performance: Proposal for a conceptual framework. Future Business Journal, 11, 106. https://doi.org/10.1186/s43093-025-00539-1
Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80(4), 549-560. https://doi.org/10.1162/003465398557825
Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835-2857. https://doi.org/10.1287/mnsc.2014.1984
Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38, 45-64. https://doi.org/10.1016/j.gfj.2017.03.001
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210-233. https://doi.org/10.1080/20430795.2015.1118917
Greene, W. H. (2012). Econometric analysis (7th ed.). Pearson Education.
Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics (5th ed.). McGraw-Hill/Irwin.
Gürsoy, A., & Erbuğa, G. S. (2024). A literature review on ESG score and its impact on firm performance. In Sustainability Development through Green Economics, 114, 157-171. Contemporary Studies in Economic and Financial Analysis. Emerald Group Publishing. https://doi.org/10.1108/S1569-375920240000114010
Hausman, J. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251-1271. https://doi.org/10.2307/1913827
Ioannou, I., & Serafeim, G. (2012). What drives corporate social performance? The role of nation-level institutions. Journal of International Business Studies, 43, 834-864. https://doi.org/10.1057/jibs.2012.26
Kalyani, S., & Mondal, R. (2024). Is ESG disclosure creating value propositions for the firms? An SLR and meta-analysis of how ESG affects the financials of a firm. Corporate Ownership & Control, 21(1), 96-117. https://doi.org/10.22495/cocv21i1art9
Khamis, S., Ibrahim, Y., & Moubarak, H. (2025). Sustainability practices and financial performance: a meta-analysis approach. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-09-2024-0678
Krüger, P. (2015). Corporate goodness and shareholder wealth. Journal of Financial Economics, 115(2), 304-329. https://doi.org/10.1016/j.jfineco.2014.09.008
Kweh, Q. L., Ting, I. W. K., Lu, W. M., Asif, J., & Le, H. T. M. (2025). Nonlinear relationship between ESG factors and firm efficiency among unity software’s affiliates. Eurasian Business Review, 15, 481-515. https://doi.org/10.1007/s40821-025-00307-9
Li, X., Saat, M. M., Khatib, S. F. A., & Liu, Y. (2024). Sustainable development and firm value: How ESG performance shapes corporate success—a systematic literature review. Business Strategy & Development, 7(4), e70026. https://doi.org/10.1002/bsd2.70026
Lim, W. M., Ciasullo, M. V., Douglas, A., & Kumar, S. (2022). Environmental social governance (ESG) and total quality management (TQM): A multi-study meta systematic review. Total Quality Management & Business Excellence, 1-23. https://doi.org/10.1080/14783363.2022.2048952
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), 1785-1824. https://doi.org/10.1111/jofi.12505
Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market value. Journal of Marketing, 70(4). https://doi.org/10.1509/jmkg.70.4.001
Marchan, H. G. (2024). A bibliometric review of sustainability and firm performance. Multidisciplinary Reviews, 7(10), e2024230. https://doi.org/10.31893/multirev.2024230
Mendonça, J. A., Alves Roberto, F. R., Kai, D. A., & Benitez, G. B. (2025). The lock-in effect on ESG and business performance relationship: A critical examination and meta-analysis. Corporate Social Responsibility and Environmental Management, 32(5), 6912-6936. https://doi.org/10.1002/csr.70062
Narula, R., Rao, P., Kumar, S., & Paltrinieri, A. (2024). ESG investing & firm performance: Retrospections of past & reflections of future. Corporate Social Responsibility and Environmental Management, 32(1), 1096-1121. https://doi.org/10.1002/csr.2982
Nguyen, T. K. O., & Nguyen, T. L. H. (2025). Exploring ESG configurations for higher financial performance by qualitative comparative analysis: Evidence from listed manufacturing firms. Journal of Governance & Regulation, 14(3), 81-92. https://doi.org/10.22495/jgrv14i3art8
Omri, N. A. E., & Guenichi, H. (2026). Can one desire too much of a good thing? Nonlinear effects of ESG disclosure on firm performance. Sustainable Development. https://doi.org/10.1002/sd.70720
Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. CESifo Working Paper No. 1229. https://www.ifo.de/DocDL/cesifo1_wp1229.pdf
Popescu, C. E., Pentescu, A., & Shivarov, A. (2023). Sustainability, ESG ratings and corporate performance in the manufacturing sector: A research review. European Journal of Interdisciplinary Studies, 15(2), 186-209. https://doi.org/10.24818/ejis.2023.24
Prashar, A. (2021). Moderating effects on sustainability reporting and firm performance relationships: a meta-analytical review. International Journal of Productivity and Performance Management, 72(4), 1154-1181. https://doi.org/10.1108/IJPPM-04-2021-0183
Refinitiv. (2023). Refinitiv Eikon database. https://www.refinitiv.com
Servaes, H., & Tamayo, A. (2013). The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science, 59(5), 1045-1061. https://doi.org/10.1287/mnsc.1120.1630
Shaikh, I. (2022). Environmental, social, and governance (ESG) practice and firm performance: An international evidence. Journal of Business Economics and Management, 23(1), 218-237. https://doi.org/10.3846/jbem.2022.16202
Singh, P. (2024). ESG disclosure and firm value in emerging markets: Separating substance from strategy. Scholedge International Journal of Business Policy & Governance, 11(2), 14-22. https://doi.org/10.19085/sijbpg110201
Singhania, M., & Gupta, D. (2024). Impact of Environmental, Social and Governance (ESG) disclosure on firm risk: A meta-analytical review. Corporate Social Responsibility and Environmental Management, 31(4), 3573-3613. https://doi.org/10.1002/csr.2725
Tang, H., Ooi, K. L., Wu, W., & Fu, T. (2023). Bibliometrics based and systematic literature analysis of ESG practices and implications to firm performance. International Journal of Accounting, Finance and Business, 8(50). https://academicinspired.com/ijafb/article/view/761
Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (2nd ed.). MIT Press.
Downloads
Veröffentlicht
Zitationsvorschlag
Ausgabe
Rubrik
Lizenz
Copyright (c) 2026 International Journal of Contemporary Economics and Administrative Sciences
Dieses Werk steht unter der Lizenz Creative Commons Namensnennung 4.0 International.
The Author(s) must make formal transfer of copyright for each article prior to publication in the International Journal of Contemporary Economics and Administrative Sciences. Such transfer enables the Journal to defend itself against plagiarism and other forms of copyright infringement. Your cooperation is appreciated. You agree that copyright of your article to be published in the International Journal of Contemporary Economics and Administrative Sciences is hereby transferred, throughout the World and for the full term and all extensions and renewals thereof, to International Journal of Contemporary Economics and Administrative Sciences.
The Author(s) reserve(s): (a) the trademark rights and patent rights, if any, and (b) the right to use all or part of the information contained in this article in future, non-commercial works of the Author's own, or, if the article is a "work-for-hire" and made within the scope of the Author's employment, the employer may use all or part of the information contained in this article for intra-company use, provided the usual acknowledgements are given regarding copyright notice and reference to the original publication.
The Author(s) warrant(s) that the article is Author's original work, and has not been published before. If excerpts from copyrighted works are included, the Author will obtain written permission from the copyright owners and shall credit the sources in the article. The author also warrants that the article contains no libelous or unlawful statements, and does not infringe on the rights of others. If the article was prepared jointly with other Author(s), the Author agrees to inform the co-Author(s) of the terms of the copyright transfer and to sign on their behalf; or in the case of a "work-for-hire" the employer or an authorized representative of the employer.
The journal is registered with the ISSN : 1925-4423.
IJCEAS is licensed under a Creative Commons Attribution 4.0 International License.
This license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials.
