Relevance of corporation quality and environmental protection, social responsibility, and corporate governance

Abstract

This study explores the relationship between corporate ESG performance, various corporate quality metrics, and the F-Score. The empirical results obtained using composite quality indicators based on traditional financial performance metrics exhibit a significant positive correlation with corporate ESG performance and with the individual dimensions of E, S, and G. The F-Score also exhibits a significant positive correlation with corporate ESG performance, supporting the notion that companies with better quality are more willing to allocate extra resources to ESG. The empirical model in this study reveals higher explanatory power for overall corporate ESG performance and the social responsibility dimension. This study is the first to reveal the relationship between composite quality indicators and the emerging sustainability indicator, ESG, in the Taiwan capital market, thereby filling a substantial gap in the literature.