Search Results (3)

In light of growing concerns about sustainable development and green innovation, the green market has progressively taken center stage in the financial markets. From the nonlinear information transmission angle, we look into the interconnectedness between the global banking sectors and the green markets using transfer entropy causal networks, containing the Dow Jones Green Bond Index (SPGB), Dow Jones Sustainability Index (DJSI), The S&P Global Clean Energy Index (SPCL), and MSCI World ESG Leaders Index (ESGL). We observe significant bidirectional causal relationships between two markets. The banking industries of developed nations and emerging economies like South Korea, Indonesia, and India are the most important, while four green markets are vital. Furthermore, using the CEEMDAN-SE-KM approach, this study also investigates the two markets’ heterogeneous performance at various time scales. The causal relationships between two markets exhibit heterogeneity at time scales, and that is most noticeable at the short-term scale. Additionally, after the COVID-19 pandemic and the conflict between Russia and Ukraine, there is an increase in the causal relationships between the two markets and a higher efficiency of information transmission. These results help regulatory bodies and green market players have a more thorough understanding of and dynamic regulation of the green market. Full article

This study investigated the effect of sustainability performance on financial performance in developed and developing countries. It also aimed to determine the moderator effect of firm size. The factor for sustainability performance was listed in the BIST Sustainability Index for Turkey and the Dow Jones Sustainability Korea Index for South Korea. ROE, ROA, ROS, and MV/BV were used as financial performance factors. Companies included in the KOSPI 100 index for South Korea and the BIST 100 index for Turkey were examined. Panel regression analysis and Generalized Method of Moments (GMM) analysis were performed to determine the effect of the past value of financial performance factors on their current value. The results show that the impact of sustainability performance on financial performance differs between South Korea and Turkey. In addition, the moderator variable has a significant effect only on ROA (return on assets) for Turkey and on ROE (return on equity) and ROS (return on sales) for South Korea. The results of the GMM analysis show that the past ROA and ROE values affect the current values statistically and positively for South Korea. For Turkey, the past ROE, ROS, and MV/BV (Market Value/Book Value) positively affect the current values. In addition to theoretical implications, implications for policy-makers and practitioners are also presented. Finally, this study provides significant insights for decision-makers and policy-makers to improve sustainability and corporate responsibility in financial and other similar settings. Full article

In this study, we explore the stock market’s response to new information that a firm has been included in the Dow Jones Sustainability Index (DJSI) in Korea. In addition, we investigate which investor group contributes to the changes, if any significant increase in returns is found, after a firm’s incorporation into the DJSI. This study aims to identify which investors value corporate social responsibility (CSR) in the Korean stock market and examine whether the government-led campaigns for CSR have affected private sector investors, as well as those from the public sector. We find statistically significant abnormal returns for firms after their first listing in the index, implying that investors in Korean markets consider a firm’s inclusion in the DJSI as good news for the firm value. Using a unique dataset from the Korea Exchange (KRX) on investors, we classify investors into four groups: individual investors, public pension funds, other institutional investors, and foreign investors. Unlike prior studies that focus only on the existence of abnormal returns, we investigate the trading behavior of each investor group for such announcements. We find that it is mainly the buying pressure of public pension funds that generates abnormal returns. By contrast, we cannot find statistically significant results for the other investor groups. This result implies that the government-led campaign for CSR has only had limited effects in the Korean stock market, and that awareness of CSR in the private sector should be improved. Full article