Abstract
The study seeks to enhance the current understanding of how corporate social responsibility (CSR) and environmental, social, and governance (ESG) factors influence firm performance. We establish a theoretical framework and provide empirical data on the influence of CSR/ESG on the sustained financial performance of publicly traded Fortune 500 companies between 2018 and 2021. Our model explains the way CSR/ESG activities affect a firm's ongoing financial success by revealing valuable signals to stakeholders. We employed quantile regression analysis to assess the connection, and found that a firm's CSR/ESG initiatives have both immediate and lasting long-term effects. Our findings contribute to and expand the literature on firm performance and sustainable competitive advantage. Companies adopting CSR/ESG can enhance a firm's performance and attain a sustainable competitive advantage.
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