We would like to invite all enthusiasts and finance researchers to April 2023 Kozminski University Finance Research Seminar: "Does the social pillar of ESG affect technical efficiency? A Stochastic Frontier Approach".
When? 24 April 2023, 5:15 PM (CET)
Where? Microsoft Teams (Online) (MS Teams link will be sent following registration below)
Speaker: Prof. Carlos Manuel Pinheiro
ABSTRACT: Sustainability has become the new normal for value creation in the long haul, and is on the top of board agendas. We assess the relationship between the social pilar of ESG and a firm’s output gap justified by systematic inefficiency. To do so we apply a stochastic frontier model to a large sample of U.S. listed firms, spanning 2005 to 2019. Focusing on measures of companies’ management commitment and effectiveness towards catering closely to their workforce job conditions and well-being, we document an economically sizable and statistically significant positive association between technical efficiency and social responsibility performance. Employee-oriented CSR practices appear to be relevant aspects in explaining the association of socially responsible practices with technical efficiency. Firm inefficiency is explained by firm specific factors and is an decreasing (increasing) function of size (leverage, diversification and foreign sales). It is mitigated by CSR practices and external governance mechanisms, as well as market surveillance. The association between CSR and technical efficiency is non-linear and varies across industry sectors. Our results should interest managers and stakeholders in general.
Associate Professor at Universidade Europeia, Lisbon, Portugal teaching Finance and related disciplines. He has worked as a manager in the banking industry for more than 30 years. Skilled in negotiation, business planning, banking, entrepreneurship, he holds a PhD in Finance from ISCTE Business School, Lisbon University Institute. He has published in ISI- and Scopus-indexed journals – including Journal of Banking and Finance, Journal of International Money and Finance, Journal of Financial Stability, Financial Markets, Institutions & Instruments -, co-authored a book on Derivatives, and conducts research as a member at the Business Research Unit (BRU) - Lisbon University Institute. His research interests span Financial institutions, Financial Markets, International Economics, Governance and Behavioral Finance.