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This study examines the association between the environmental, social, and governance (ESG) performance and firm risk in U.S. financial firms. We find a significant negative association between the composite ESG performance and total, idiosyncratic, and systematic risks after controlling for firm and year fixed effects and other risk predictors. We also examine the effect of each pillar of ESG on this relationship and find that "S" and "G" exhibit a significant negative relationship with both systematic and idiosyncratic risks of firms, while "E" is only associated with systematic risk. Lastly, we demonstrate that ESG performance is negatively associated with the extent to which leverage contributes to firm risk, supporting our premise that ESG alleviates financial risk. Overall, we provide empirical evidence of potential risk management benefits of ESG in the financial industry. [ABSTRACT FROM AUTHOR]

This study is an attempt to explore the predictive effect, in terms of operational capability, of a large manufacturing firm's environmental greening efforts carried out in the interest of sustainability, and of the firm's reputation for social responsibility. Through both a traditional and a new, innovative approach, this study investigates the potential synergistic effect of environmental sustainability and the improvement of corporate reputation on a firm's market performance in terms of shareholders' equity value (market value added, or MVA) when taken together with the firm's other key differential business factors. The findings of this study provide notable implications that establish the integrative paradigm for the influence of environmental greening sustainability on firm performance through the use of an innovative methodological approach regardless of a priori theoretical assumptions. Through this, the impact of environmental sustainability and corporate reputation, as well as their synergistic effect, on firm performance push forward a new foundation in business practice. The major findings and new methodological approach (Back-Propagation Neural Networks; BPNN) in this study will open a broad new spectrum of opportunities for further research on these topical issues. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between international diversification and performance by matching a sample of 400 U.S. and 400 Korean firms on industry type and testing the relationship over five [...]