The effect of ESG on financial performance and firm value: The moderating role of CEO power in the ISE
Subject Areas : International Journal of Finance, Accounting and Economics Studies
Saleh Mahdi Abd Ali Ahmed
1
,
saeid aliahmadi
2
,
Faez Abdulhasan Jasim Jasim
3
,
Afsaneh Soroushyar
4
1 - Department of Accounting, Isfahan (Khorasgan) Branch,Islamic Azad University, Isfahan, Iran
2 - Department of Accounting, Isfahan (Khorasgan) Branch,Islamic Azad University, Isfahan, Iran.
3 - Department Business of Administration, college of Administration and Economics, University of Misan, Amarah, 62001, Misan, Iraq
4 - Department of Accounting, Isfahan (Khorasgan) Branch,Islamic Azad University, Isfahan, Iran.
Keywords: CEO power, ESG, Financial Performance, Firm Value, Stakeholders Theory.,
Abstract :
The purpose of the present study is to analyze the moderating impact of CEO power on the link between environmental, social and, governance (ESG) and financial performance and firm value in the Iraq Stock Exchange (ISE). With a sample of ISE covering 2013-2022, multivariate linear regression estimation was used to test the study hypotheses by panel data method. The study sample includes 440 firm-year observations (44 firms). the financial performance (FP) and firm value (FV) were used as dependent variables. ESG score and CEO power were used as independent and interaction variables, respectively. The authors' results indicate that the link between ESG and FP improves under the influence of CEO power. Also, the findings show that the power of the CEO has a significant impact on association between ESG score and FV. These results remained stable by performing robustness checks. The findings of the study confirmed the stakeholder theory. The critical contribution of this study is that it is one of the early studies that provides insight into the interaction impact of the power of the CEO on the link between ESG and FP (or ESG and FV) in Iraq’ emerging economy