The Impact of ESG Performance on the Value Relevance of Agribusiness Firms in BRICS
DOI:
https://doi.org/10.14392/asaa.2025180211Keywords:
Environmental, Social, and Corporate Governance, ESG, Value Relevance, Agribusiness, BRICSAbstract
Purpose: This study aims to analyze the relationship between environmental, social and governance (ESG) performance and stock prices of agribusiness companies in the BRICS.
Design/methodology/approach: The final sample comprises 196 observations from thirty-nine agribusiness companies across the five BRICS countries, covering the period from 2009 to 2022. Data was collected from the London Stock Exchange Group plc (LSEG) and analyzed using panel data methods, specifically Generalized Least Squares (GLS) and Panel-Corrected Standard Errors (PCSE).
Findings: The results indicate that the ESG variable exhibits a significant and positive relationship with stock prices across the overall analysis period (2009-2022) in both models. This suggests that investors in agribusiness companies in BRICS countries consider ESG performance information a significant factor in their investment decisions. The findings align with the Stakeholder Theory, which emphasizes the importance of building stakeholder trust to secure investments. However, they also resonate with Signaling Theory, which shows that ESG disclosure functions as a credible signal of corporate quality that reduces information asymmetry, and with Legitimacy Theory, which suggests that ESG adoption helps firms meet societal and institutional expectations.
Contributions: This study contributes to the academic debate by expanding the literature on the impact of ESG in agribusiness, particularly in the context of emerging economies within BRICS, and by integrating different theoretical lenses to explain how the market prices ESG performance. Practically, it guides investors in making informed decisions, mitigating risks, and pursuing long-term returns. It also highlights the social relevance of ESG performance in shaping investors’ perceptions, as improved ESG performance can attract more investment and incentivize agribusiness companies to adopt more responsible strategies, thereby fostering sustainable development.
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