Impact of Environmental, Social, and Governance (ESG), Profitability and Macroeconomics Indicators on Firm Performance

Masturah Ma’in; Shahariah Asmuni; Sutina Junos; Siti Nurhafiza Rostam; Noor Hidayatul Aqmar Azmi; Khairunnisa Rabiah Sahidza

Masturah Ma’in Faculty of Business and Management, Universiti Teknologi MARA, 42300, Puncak Alam, Selangor, Malaysia http://orcid.org/0000-0002-7898-085X
Shahariah Asmuni Faculty of Business and Management, Universiti Teknologi MARA, 42300, Puncak Alam, Selangor, Malaysia http://orcid.org/0000-0002-5682-2770
Sutina Junos Faculty of Business and Management, Universiti Teknologi MARA, 71300 Rembau, Negeri Sembilan, Malaysia http://orcid.org/0000-0003-2077-7864
Siti Nurhafiza Rostam Faculty of Business and Management, Universiti Teknologi MARA, 42300, Puncak Alam, Selangor, Malaysia
Noor Hidayatul Aqmar Azmi Faculty of Business and Management, Universiti Teknologi MARA, 42300, Puncak Alam, Selangor, Malaysia
Khairunnisa Rabiah Sahidza Faculty of Business and Management, Universiti Teknologi MARA, 42300, Puncak Alam, Selangor, Malaysia

Abstract

Firms that are ESG compliant have better governance, care more about the environment and sustainable development, have lower profits volatility and access to lower-cost funding. Many investors can easily make judgment based on firm performance rather than financial success if ESG is incorporated into a firm's investment decision. The purpose of this study is to examine the relationship between ESG score, profitability, growth domestic product (GDP) growth, labor force, and population with Malaysian firms’ performance. A multiple regression technique is used to estimate the ordinary least square (OLS) method from year 2010 to 2020. The result identifies that ESG score, GDP growth, and population has significant relationship with firm performance.

Research paper

Keywords: Firm Performance; ESG; Profitability; Macroeconomic Indicators; Malaysia

Reference to this paper should be made as follows: Ma’in, M., Asmuni, S., Junos, S., Rostam, S. N., Azmi, N. H. A., & Sahidza, K. R. (2022). Impact of Environmental, Social, and Governance (ESG), Profitability and Macroeconomics Indicators on Firm Performance. Journal of Entrepreneurship, Business and Economics, 10(2), 1–17.