The Impact of Managers’ Competence on the Relationship between Designation of Respected Firms and ESG Investment

Abstract

This study examines the relationship between the designation of respected firms and Environmental, Social, and Governance (ESG) investment, while also investigating the impact of managers' competence on this relationship. Using regression analysis on a sample of 738 Korean firms from 2014 to 2021, the findings reveal that firms designated as the most respected in the market tend to make more ESG investments. Additionally, the most respected firms with highly competent managers are more likely to invest in ESG. These results suggest that the designation as a respected firm serves as an intangible asset that positively affects firm value. This research provides empirical evidence on the connection between the most respected firm designation and ESG investment, offering academic and practical insights into how ESG investment contributes to a company's sustainability.