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Stakeholder Theory in Action, The Impact of ESG Practices on Financial Performance in SADC Region Food Producers

Year 2025, Volume: 26 Issue: 1, 105 - 118, 21.01.2025

Arzu Şahin , Walid Khalid Mitawa

https://doi.org/10.37880/cumuiibf.1550589

Abstract

In recent years, there has been a notable shift towards incorporating non-fincancial metrics, particularly environmental, social, and governance (ESG) factors, into the corporate financial performance (CFP) evaluation framework. The primary aim of this research is to explore the impact of ESG practices on corporate financial performance, with a particular focus on the Southern African Development Community (SADC) region, which is frequently underrepresented in global ESG debates. The study concentrates on the food production sector, a key industry for this region. To achieve this aim, after the theoretical background on the subject, the empirical section examines whether engagement in ESG practices contributes to financial performance, measured primarily by Tobin's Q and alternatively by the market-to-book value ratio. The panel data models are employed for 8-year panel data of 32 publicly traded food producer companies of the SADC region between 2015 and 2022. Additionally, for the robustness test, the analysis is also repeated on a subset of 14 food producers listed in South Africa. According to the analysis results, companies disclosing ESG practices and so having an ESG score operate with higher Tobin Q and market-to-book value ratio, across both the SADC and South Africa samples. The findings suggest that companies actively involved in social, environmental, and governance initiatives, alongside transparent disclosure of their responsible practices, tend to exhibit superior financial performance. This finding is consistent with stakeholder theory, suggesting that firms can only enhance their long-term financial performance by fulfilling their responsibilities to all stakeholders and, ultimately, to society.

Keywords

Corporate Social Responsibility (CSR) Environmental Social Governance (ESG) Practices Corporate Financial Performance (CFP) Tobin Q Food Producers Southern African Development Community (SADC)

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Stakeholder Teorisi Uygulamada: SADC Bölgesindeki Gıda Üreticilerinde ESG Uygulamalarının Finansal Performansa Etkisi

Year 2025, Volume: 26 Issue: 1, 105 - 118, 21.01.2025

Arzu Şahin , Walid Khalid Mitawa

https://doi.org/10.37880/cumuiibf.1550589

Abstract

Son yıllarda, özellikle çevresel, sosyal ve yönetişim (ÇSY) faktörleri olmak üzere finansal olmayan ölçütlerin kurumsal finansal performans (KFP) değerlendirme çerçevesine dahil edilmesine yönelik belirgin bir yönelim yaşanmaktadır. Bu araştırmanın temel amacı, ÇYS uygulamalarının kurumsal finansal performans üzerindeki etkisini, özellikle küresel ÇYS tartışmalarında sıklıkla yeterince temsil edilmeyen Güney Afrika Kalkınma Topluluğu (SADC) bölgesine odaklanarak araştırmaktır. Çalışma, bu bölge için önemli bir sektör olan gıda üretim sektörüne odaklanmaktadır. Bu amaca ulaşmak için, konuyla ilgili teorik arka planın ardından ampirik bölümde, ESG uygulamalarına katılımın temel olarak Tobin Q ve alternatif olarak piyasa-defter değeri ile ölçülen finansal performansa katkıda bulunup bulunmadığı incelenmiştir. SADC bölgesinde halka açık 32 gıda üreticisi şirketin 2015 ve 2022 yılları arasındaki 8 yıllık panel verilerine panel veri modelleri, uygulanmıştır. Ayrıca sağlamlık testi için analiz, Güney Afrika'da listelenen 14 gıda üreticisinden oluşan bir alt örneklem üzerinde tekrarlanmıştır. Analiz sonuçlarına göre, SADC ve Güney Afrika örneklemlerinin her ikisinde de, ESG uygulamalarını açıklayan ve dolayısıyla bir ESG puanına sahip olan şirketler daha yüksek Tobin Q ve piyasa defter değeri oranı ile faaliyet göstermektedir. Bulgular, sosyal, çevresel ve yönetişim girişimlerine aktif olarak katılan ve sorumlu uygulamalarını şeffaf bir şekilde açıklayan şirketlerin üstün finansal performans sergileme eğiliminde olduklarını öne sürmektedir. Bu bulgu, firmaların uzun vadeli finansal performanslarını ancak tüm paydaşlara ve nihayetinde topluma karşı sorumluluklarını yerine getirerek artırabileceklerini öne süren paydaş teorisi ile tutarlıdır.

Keywords

Kurumsal Sosyal Sorumluluk (CSR) Çevresel Sosyal Yönetişim (ESG) Uygulamaları Kurumsal Finansal Performans (CFP) Tobin Q Gıda Üreticileri Güney Afrika Kalkınma Topluluğu (SADC).

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Details

Primary Language English
Subjects Finance, Finance and Investment (Other)
Journal Section Makaleler
Authors

Arzu Şahin 0000-0002-9944-1791

Walid Khalid Mitawa 0000-0002-8488-6413

Early Pub Date January 19, 2025
Publication Date January 21, 2025
Submission Date September 17, 2024
Acceptance Date November 11, 2024
Published in Issue Year 2025Volume: 26 Issue: 1

Cite

APA Şahin, A., & Mitawa, W. K. (2025). Stakeholder Theory in Action, The Impact of ESG Practices on Financial Performance in SADC Region Food Producers. Cumhuriyet Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 26(1), 105-118. https://doi.org/10.37880/cumuiibf.1550589
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