Government Performance Research Articles

Are lead independent directors greener? Evidence from climate change commitment and ESG performance

PurposeThis paper sheds light on how appointing a lead independent director (LIDIR) affects a firm’s commitment to climate change and to what extent environmental, social and governance (ESG) performance is affected by a firm’s commitment to climate change in the presence of a LIDIR.Design/methodology/approachThe authors utilise ordinary least squares (OLS) and a sample of 12,236 firm-year observations in the United States of America (USA) over the 2002–2019 period to test the predictions. The authors also apply alternative research designs such as propensity score matching, Heckman two-step and instrumental variable techniques to address endogeneity concerns.FindingsThe authors find that a LIDIR representation on the board is positively associated with a firm’s commitment to climate change. The authors also find that the association between a LIDIR representation on the board and a firm’s commitment to climate change is more pronounced in firms with a combined chief executive officer (CEO) and board chair positions than firms with both positions separated. Additional analysis suggests that increased commitment to climate change in the presence of a LIDIR improves ESG performance.Originality/valueWhile the effect of a LIDIR on firm financial outcomes has received much attention, there is a lack of empirical evidence on whether lead independent directors are greener. The authors provide new and important contribution to the literature by investigating the relationship between an LIDIR representation on the board and non-financial outcomes from the perspective of climate change commitment and ESG performance. The findings may be informative to policymakers seeking to deal with climate change impacts on society to encourage the appointment of a LIDIR.

Analysis of the public political participation index for the 2024 simultaneous regional elections in West Sulawesi

This study aims to analyze the level of political participation in the upcoming 2024 Simultaneous Regional Head Elections in West Sulawesi Province. A mixed-method approach was employed, combining quantitative surveys and qualitative interviews to assess the political participation index and patterns of participation behavior. The research was conducted from January to April 2024, focusing on participants aged 20 years and above, all of whom were registered voters. The target population included active voters from various districts in West Sulawesi, using stratified sampling to ensure demographic and geographic representation. The sample comprised 122 survey respondents and 15 key informants selected purposively based on their roles in the electoral process. Results indicate that political participation is projected to increase compared to previous elections, though gaps remain between districts. Districts with better access to information and local leaders’ involvement show higher participation. Factors influencing participation include: (1) demographic factors, with the 30–45 age group showing higher participation, while younger generations (under 30 years) demonstrate apathy; (2) socio-cultural factors, where traditional norms and the role of religious leaders influence voter mobilization; and (3) political factors, including trust in candidates and local issues such as infrastructure. Barriers to participation include a lack of political education, apathy due to dissatisfaction with government performance, and administrative issues. Efforts to enhance participation include community-based education and social media, although these have not been fully optimized.

Corporate Environmental, Social, and Governance Performance: The Impacts on Financial Returns, Business Model Innovation, and Social Transformation

Corporate sustainability performance becomes the central element in many current business developments: the total value of ESG investment grows, more and more clients want to invest in projects that deliver more than the pure financial return, companies are innovating and transforming their business models, and adopting the B-Corp values. Environmental and wider societal impact becomes the central focus of the businesses that want to become the force for good. This article adopts an empirical approach and builds an ESG index of corporate performance based on eight critical metrics representing the economic, social, and environmental dimensions under varying policy priorities. Furthermore, it investigates correlations between these aggregate ESG indices and share prices as well as return on investment, or ROE, of companies. The article goes on to investigate empirically the correlation between employees/turnover, diversity, CO2 emissions, waste generation, and water use of companies and share prices and ROE metrics, respectively. The reasons for divergence between correlations of sustainability performance indicators with share prices, ROE, and profits/turnover are discussed in detail, with particular attention drawn to the reasons why diversity might matter more for the share prices than ROE and why waste generation, water use, and CO2 emissions might still be poorly reflected in the ROE while some of these metrics have a significant connection with the profit/turnover ratio. The article will undoubtedly be of interest to ESG fund managers, investors, corporate sustainability officers, and policymakers.

How Japan’s COVID-19 vaccination policy shapes trust in governance: a relative deprivation approach

Abstract This study examines changes in the association between social policy performance and trust in government, focusing on the Coronavirus disease 2019 (COVID-19) vaccination policy implemented by Japan’s central government. Data from the Online Panel Survey of Stratification and Social Psychology (SSPW2021-Panel) were analyzed using two-way fixed effects regression models. The quadratic term of the COVID-19 vaccination rate at the prefecture level had statistically significant effects on the evaluation of the central government’s infection control policies and trust in the central government. This implies that the relative deprivation experienced by unvaccinated individuals weakened trust in the central government in the early stage, and the decline in the number of unvaccinated individuals strengthened trust in the central government in the latter stage. Thus, this paper finds that even if a social policy meets people’s demands, its implementation may temporally damage the government’s reputation through relative deprivation.

Artificial intelligence and corporate ESG performance: evidence from China

ABSTRACT This study investigates the effect of artificial intelligence (AI) on corporate Environmental, Social, and Governance (ESG) performance. We utilize sample data from Chinese listed enterprises from 2009 to 2022 and find that AI significantly elevates corporate ESG performance. After a series of robustness checks, this result remains robust. The mechanism analysis indicates that AI enhances ESG performance by improving operational efficiency and optimizing human capital. Furthermore, the positive impact of AI on corporate ESG performance is more significant in state-owned enterprises, high-tech enterprises, and those located in the eastern regions. Overall, we systematically evaluate the social value of AI in emerging nations such as China from a novel ESG perspective.

Does Corruption Control Enhance ESG-Induced Firm Value? Insights from Machine Learning Analysis

This study adopts advanced causal machine learning (ML) techniques to investigate the impact of country-level corruption on the market valuation of firms’ environmental, social, and governance (ESG) performance. By employing double-debiased machine learning (DML) and linear regression analysis, we find that ESG performance positively influences firm value. This positive relationship is more pronounced for firms operating in countries with lower levels of corruption. The use of DML enhances effect identification and yields findings that closely align with those derived from linear regression, thereby providing robust support for the pivotal role of corruption control in enhancing ESG-induced firm value.

THE INFLUENCE OF THE BOARD CHARACTERISTICS ON THE ENVIRONMENTAL, SOCIAL, AND GOVERNANCE PERFORMANCE OF THE NSE-LISTED COMPANIES

This article examines how the size of the board, the presence of women on the board, and the critical mass of women on the board affect the environmental, social, and governance (ESG) performance of companies listed on the NSE. This study is a cross-sectional analysis that relies on secondary data from the CRISIL database and examines a sample of 973 companies listed on the NSE. The Credit Rating Information Services of India Limited (CRISIL) assigns an ESG score to assess Indian firms' ESG performance. We collected data on female representation and board size from the yearly reports of the firms and their respective websites. Our investigation findings indicate that Indian corporations prioritize social and governance issues more significantly than environmental concerns. The results indicate that the board characteristics have a varied impact on the ESG performance of the companies listed on the NSE.

Literature review on local government financial performance measurement

Financial performance of local governments plays a critical role in ensuring the success of fiscal decentralization and sustainable regional development. As fiscal responsibilities shift from central to regional governments, the ability to measure and evaluate financial performance becomes increasingly important. This study synthesizes theoretical frameworks and empirical research to provide a comprehensive understanding of financial performance measurement in local governments. The metrics analysed include Locally Generated Revenue (LGR), Financial Ability Index (FAI), and fiscal independence. The study identifies key challenges in the measurement process, such as dependency on central transfers, variations in economic potential, and inconsistencies in financial reporting. It further explores the formulas and methodologies underlying these metrics, emphasizing their application in evaluating local fiscal health. Policy recommendations focus on standardizing metrics, enhancing technical capacity, and formulating innovative strategies to optimize revenue generation and ensure regional fiscal sustainability.

Local Government Financial Performance: Good Governance, the Efectiveness Internal Control and Competence

Good governance is an important foundation in creating transparency, accountability, and integrity in organizational management. This study aims to analyze how the principles of good governance, internal control and competence of the financial performance of the Bekasi City local government are moderated by internal control. This study uses a quantitative methodology with a sample of 41 respondents who are financial employees in the Bekasi City government with statistical testing using Smart PLS 3.0. The results of the study found that (1) good governance, internal control and competence have a positive effect on the financial performance of the local government. (2) Good governance contributes to creating transparency and accountability. (3) Internal control in good financial reporting can prevent deviations. In addition, this study also found that the competence of human resources in the financial sector plays an important role in effective budget management. This study provides recommendations that the importance of improving governance, internal control, and human resource competence as a strategic effort to improve the financial performance of the local government.

Evaluating the Influence of Environmental, Social, and Governance (ESG) Performance on Green Technology Innovation: Based on Chinese A-Share Listed Companies

In the context of the rapid development of the global economy, promoting corporate economic development while taking into account sustainable development has gradually become the focus of attention of countries around the world. The ESG performance reflects the differences in the assessment of enterprises’ sustainable development potential by capital market information intermediaries. These differences affect the internal governance and external financing of enterprises, thereby influencing corporate green innovation. This research is based on 1500 Shanghai-Shenzhen A-share listed companies in China from 2012 to 2022. Using green technology innovation quantity (GINUM) and green technology innovation quality (GICIT) as the measures of corporate green innovation capabilities, and by constructing a DiD model and a benchmark regression model, the dynamic relationship between ESG performance and green innovation is explored. At the same time, the mediation effect model is introduced to examine the impact of ESG performance on corporate green innovation capabilities from three perspectives: financing constraints, management’s green development awareness, and employee innovation efficiency. In addition, endogenous analysis methods and robustness test methods are employed to further ensure the reliability of the research results. The research findings show that ESG performance can significantly promote corporate green innovation capabilities. Heterogeneity analysis reveals that ESG performance significantly enhances the green technology innovation capabilities of enterprises, especially among non-state-owned small and medium-sized enterprises (SMEs) and enterprises in the eastern region. The regression coefficients for GINUM and GICIT are 0.019, 0.021, 0.084, and 0.086, respectively, all of which are statistically significant at the 1% level. The mechanism analysis shows that in terms of alleviating financing constraints, enhancing management’s green development awareness, and improving employee innovation efficiency, the regression coefficients of ESG performance for GINUM and GICIT are −1.559, −1.953, 0.018, 0.011, 0.427, and 0.495, respectively, indicating a certain promoting effect. The results of this study enrich and expand the relevant research on the relationship between ESG and corporate green innovation capabilities to a certain extent. This research is expected to provide some new practical directions for promoting green innovation capabilities within the ESG framework.

The Influence of Business, Technology and HR Transformation Strategies on ESG (Environmental, Social & Governance) Performance in the Indonesian Energy Industry

This study aims to investigate the influence of business transformation strategies, technology and HR on ESG (Environmental, Social & Governance) performance in the energy industry in Indonesia. With the background of awareness of the importance of maintaining long-term company stability, companies are now focusing on business actions that can coexist with the environment and provide positive social impacts. Through a quantitative approach, this study assesses the relationship between transformation strategies and ESG performance, as well as their impact on companies and stakeholders. This study uses secondary data with a research population of companies in the energy sector listed on the IDX. Sample selection was carried out using the purposive sampling judgment method. This approach uses the SEM research model using smartPLS software in data management. The results of the study indicate that the construct of the three transformation strategies, namely technology and HR, can improve ESG performance through the role of business transformation as a connecting moderator. By focusing on these three aspects, the company is expected to optimize ESG performance while simultaneously creating long-term positive impacts for the environment and society.

Evaluating the Impact of Green Governance on Sustainability Performance in Nigeria's Energy Sector: A Stakeholder Perspective

This paper considers the concept of green governance as a reactionary effort or response to the environmental consequences arising from the exploitative human interaction with the elements of nature. The present industrial revolution has increased the level of production, heightened companies' profit margins, and resulted in environmental hazards. Additionally, the chain of manufacturing to consumption has resulted in environmental degradation, ozone depletion, and the destruction of traditional livelihoods for most global economies. Through empirical evidence from relevant literature, this study finds that Nigeria’s energy sector accounts for 90% of the total export volume and is the major contributor to environmental degradation; hence, the implementation of green governance and sustainability performance should be championed by the energy firms. To this end, the stakeholder theory is used to analyze a model of synergy between stakeholders to implement green governance. Nonetheless, green governance practices among these energy firms are very low compared to other developed countries such as the United Kingdom, Russia, China, and Germany. This paper concludes by providing viable future research discourses that would add to the body of knowledge on green governance practices in Nigeria.

Greening Corporate Environmental, Social, and Governance Performance: The Impact of China’s Carbon Emissions Trading Pilot Policy on Listed Companies

With carbon emissions continuing to rise, global warming has become a popular research topic. To address climate change, China is taking proactive measures to reduce its carbon emissions. Covering the period between 2009 and 2021, this study utilizes data from 3668 publicly listed companies in China, along with data from their respective cities, to investigate the impact of the carbon emissions trading pilot policy on their environmental, social, and governance (ESG) performance. The conclusions show that the policy has greatly improved corporate ESG performance. However, its impact on the corporate ESG performance has varied over time, across different entities, and among different cities. Furthermore, the companies’ level of green innovation plays a crucial intermediary role. Additionally, a company’s risk-bearing capacity and level of urban green credit support positively moderate the effectiveness of the policy. These findings enrich our understanding of the relationship between the pilot policy and corporate ESG performance.

Green Behaviors Among Employees in Chinese E-Commerce Companies: Impact of Environmental, Social, and Governance (ESG) Performance

Perceived ESG performance refers to stakeholders’ assessment of a company’s efficacy in implementing and maintaining ESG initiatives. This perception is crucial as it influences stakeholders’ trust and engagement with the company. The present study aims to test the relationships between the perceived performance of Chinese e-commerce firms and their employees’ green behaviors, with the mediating role of green psychological climate and the moderating role of ESG actions: substantive vs. symbolic. Employees’ green behavior is defined as any measurable individual behavior that contributes to environmental sustainability goals in the work context. Green psychological climate is defined as employees’ perceptions and interpretations of their organization’s policies, procedures, and practices regarding environmental sustainability. The sample includes 1285 employees from various Chinese e-commerce firms. Participants ranged in age from 19 to 66 years, with a mean age of 37.27 years (SD = 10.35). This study examines the impact of environmental, social, and governance (ESG) performance on green behaviors among employees in Chinese e-commerce companies. Leveraging data from organizational surveys, the findings reveal that perceived ESG performance significantly influences green behaviors, both directly and indirectly, through the mediating role of green psychological climate. Mediation analysis underscores the pivotal role of green psychological climate in bridging ESG performance and individual green behaviors, with the strength of this relationship varying significantly across levels of substantive ESG actions. Furthermore, while the moderating effects of ESG substantive and symbolic actions on the relationships between ESG performance, green psychological climate, and green behaviors did not achieve conventional statistical significance, observed trends suggest a nuanced interplay worthy of further exploration. These findings highlight the complexity of translating organizational ESG commitments into employee actions, emphasizing the importance of both substantive and symbolic ESG initiatives in fostering a green psychological climate. This study contributes novel insights into the mechanisms driving green behaviors in organizational contexts, offering implications for both academic research and managerial practice.

Unveiling the nexus between ESG performance, climate policy uncertainty and corporate innovation: evidence from textual analysis

PurposeThis paper aims to examine the relationship between environmental, social and governance (ESG) performance and text-based corporate innovation based on a sample of India’s ESG-disclosed companies from financial year 2011–2012 to 2021–2022. Further, it endeavors to investigate the moderating role of heightened climate policy uncertainty (CPU) in this relationship.Design/methodology/approachTo verify these hypotheses, the authors first construct a corporate innovation index for India using a sophisticated natural language processing model on each firm-year’s management discussion and analysis reports. Next, the authors use a panel fixed effects model to examine how ESG performance impacts corporate innovation and its moderating and mediating components.FindingsEmpirical evidence suggests higher ESG performance bolsters text-based corporate innovation. After addressing endogeneity issues with the system GMM estimator and two-stage least square IV, incorporating additional control variables and using alternative innovation measurement, the baseline results remain unchanged. Next, the authors find this link is mediated by reducing information asymmetry, financial constraints and managerial myopia. The authors also observe that increased CPU favorably moderates the ESG-innovation nexus. Additionally, the heterogeneity research shows that ESG only positively impacts innovation in specific industries and firms in their growth and mature life cycle phases.Practical implicationsThe results demonstrate that sustainable and ethical business practices can foster corporate innovation. Thus, this study may provide valuable insight for investors, managers and policymakers.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the relationship between ESG performance and text-based corporate innovation using a machine learning model.

Anti-corruption Efforts, Corruption Perception and Public Evaluation of Local Governments in China

Abstract China has taken significant steps to combat corruption since the 18th National Congress of the Chinese Communist Party (CCP). However, whether and how the anti-corruption efforts influence the public's evaluation of local government performance remain understudied. Using multiple data sources, including panel survey data taken from the China Family Panel Studies from 2010 to 2018, this research examines how anti-corruption efforts improve evaluations of local government performance by reducing public perception of existing corruption. Additional analysis reveals that anti-corruption efforts reduce perceived corruption primarily when the public trusts officials or has had positive experiences with them. The positive impact on local government evaluations has been more pronounced in provinces with high levels of pre-existing corruption and since the 18th CCP National Congress in 2012. Moreover, the effectiveness of anti-corruption efforts has remained consistent across all time periods since 2012.

Research on the Influence Mechanism of Environment Social Government Performance in State-Owned Enterprise Value: The Role of Digital Transformation

Under the background of sustainable development and high-quality development in China, it is of great significance to actively promote enterprises to practice ESG development concepts and digital transformation. This study uses a sample of state-owned companies in the Chinese capital market during the period from 2014 to 2020. The results of the research show that there is a U-shaped relationship between ESG performance and the value of state-owned enterprises. And digital transformation plays a positive moderating role in the relationship. The result of a further mechanism study indicates that ESG performance affects enterprise value by reducing the financing constraints. This study also examines the results using a dynamic panel model and endogeneity test method. Therefore, this study provides references to promote ESG practices and offers new insight into the role of digital transformation in state-owned companies. In order to pursue sustainable development and high-quality economic development, ESG practices and digital transformation should also be paid attention to in enterprises.

Demystifying the nexus of audit committee characteristics and sustainability performance

PurposeTo scrutinize the role of audit committee characteristics (i.e. audit committee independence, audit committee expertise and audit committee tenure) in attaining sustainability performance (i.e. environmental, social and governance performance).Design/methodology/approachUsing a sample comprising 1,304 firm-year observations from Indian listed firms from 2018 to 2024, the current study performs baseline, robustness, additional and heterogeneity tests to examine the effect of audit committee characteristics on the environmental, social and governance performance.FindingsOur findings reveal that audit committee independence and expertise are vital for achieving sustainability performance. Also, our results indicate that independence and expertise in audit committees reflect more inclination for environmental performance and governance performance than social performance. The outcomes further state that the audit committee tenure does not impact sustainability performance. Our results remain robust even after using different estimators. Additionally, the above findings are similar for industry-wise outcomes as well as during the COVID-19 phase and post-phase of the COVID-19 pandemic.Originality/valueOur study makes a practical contribution by pioneering the attributes of audit committees in achieving sustainability performance from an emerging country perspective, such as India, which has not yet been done. The study holds great importance for managers, environmental activists, regulators and policymakers, reinforcing the belief that audit committee characteristics can be utilized in formulating policies for sustainability initiatives.

Impact Of Accountability, Transferance, And Public Participation To The Work Of The Government Of The City Of Bengkulu

This study investigates the impact of accountability, transparency, and public participation on the performance of the local government in Bengkulu City, Indonesia. Utilizing a quantitative research approach, data were collected from a sample of 50 respondents through questionnaires. The analysis included various statistical tests, such as validity and reliability assessments, normality tests, multicollinearity tests, and heteroscedasticity tests, confirming the robustness of the findings. The results reveal that all three independent variables significantly influence government performance, with accountability demonstrating the highest positive effect (p-value = 0.00), followed by transparency (p-value = 0.001) and public participation (p-value = 0.000). These findings underscore the critical role of accountability, transparency, and public participation in enhancing local government effectiveness and efficiency, ultimately aligning public expectations with government performance. The study contributes to the understanding of local governance dynamics in Indonesia and highlights the necessity for improved accountability and public engagement in decision-making processes.

Digitalisation and Firm‐Level ESG Performance and Disclosures: A Scientometric Review and Research Agenda

ABSTRACTDigitalisation and sustainability are not just critical business notions; they are also interdependent drivers of future business success. By employing digital tools, firms can improve their environmental, social, and governance (ESG) performance, increase transparency, and maintain stakeholders' accountability. This increasing significance has elevated the value of examining the impact of digitalisation on firm‐level ESG performance and disclosures. This study explores this relationship by synthesising 199 relevant research records published during 2019–2024, obtained from Web of Science and Scopus, using a bibliometric and systematic literature review approach. Our descriptive analysis reveals exponential growth in publications on this relationship during the study period, focusing predominantly on quantitative research leveraging secondary data. Regression analysis emerged as the most popular analytical technique, followed by structural equation modelling. The theoretical foundations of this research are based on the resource‐based view and dynamic capabilities view. The Co‐occurrence analysis identifies China, Italy, and England as the leading contributors, with research hot spots centring around concepts such as ‘Industry 4.0’, ‘sustainability performance’, ‘sustainable development’, and ‘sustainability reporting’. Co‐citation analysis highlights the leading journals, authors, and documents, emphasising the scholarly foundations of this field. Further, thematic analysis uncovers the benefits of digitalisation across four dominant dimensions: sustainability performance, supply chain sustainability, sustainability assessment, and sustainability accounting and reporting. Finally, we discuss critical knowledge gaps and propose future research questions to advance understanding of this emerging field.