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Title: The The Impact of Environmental, Social, and Governance (ESG) Performance on Dividend Policy and Economic Outcomes of Pakistani Firms: A Survey-based Research : A Survey-based Research
Authors: Samreen Ramzan, Waseem ul Hameed
Journal: The Asian Bulletin of Green Management and Circular Economy (ABGMCE)
Publisher: ASIAN ACADEMY OF BUSINESS AND SOCIAL SCIENCE RESEARCH
Country: Pakistan
Year: 2024
Volume: 4
Issue: 1
Language: English
The purpose of this study was to measure the effectiveness of environmental, social, and governance performance on the dividend policies of registered firms on the (PSX) Pakistan stock exchange. A data set of 261 respondents from the employees of companies listed on the Pakistan Stock Exchange was collected and analyzed using Smart PLS 3. The findings of measurement model assessment and structural model were used for the analysis of the data. Based on the statistical data, the study found that environmental performance, social performance, and governance performance are three significant antecedents of the dividend policy of registered firms on the Pakistan stock exchange (PSX). The research has contributed to the literature about implications of dividend policy. The policy implications of this research are also significant for improving the dividend policy of firms registered on the Pakistan Stock Exchange. This study also aligns with the Sustainable Development Goals (SDGs), particularly SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action), by examining how ESG performance influences dividend policies in firms on the Pakistan Stock Exchange. The findings underscore the importance of integrating sustainability into corporate strategies to enhance financial outcomes and support global sustainability targets.
To measure the effectiveness of environmental, social, and governance (ESG) performance on the dividend policies of firms listed on the Pakistan Stock Exchange (PSX) and to examine the alignment of ESG initiatives with Sustainable Development Goals (SDGs).
A survey-based research using a dataset of 261 respondents from employees of companies listed on the Pakistan Stock Exchange. Data was collected using a Likert scale questionnaire and analyzed using Smart PLS 3 with Partial Least Square - Structural Equation Model (PLS-SEM). Items for ESG performance were adapted from Ha et al. (2023), and for dividend policy from Salman (2019).
graph TD
A["Data Collection via Survey"] --> B["Data Analysis using Smart PLS 3"];
B --> C["Measurement Model Assessment"];
C --> D["Structural Model Assessment"];
D --> E["Key Findings"];
E --> F["Discussion & Conclusion"];
The study's findings suggest that strong ESG performance positively influences dividend policies. This aligns with the growing investor interest in sustainability and responsible corporate behavior. The research contributes to understanding the impact of ESG on financial outcomes in the context of developing economies like Pakistan and links these practices to global sustainability targets.
Environmental performance, social performance, and governance performance are all significant antecedents of the dividend policy of firms listed on the Pakistan Stock Exchange.
Integrating ESG practices in line with SDGs significantly improves the dividend policies of firms listed on the Pakistan Stock Exchange. This strategic alignment benefits stakeholders, attracts responsible investments, and contributes to the global sustainability agenda.
- The study collected data from 261 respondents.
- The analysis was conducted using Smart PLS 3.
- Environmental performance, social performance, and governance performance were found to be significant predictors of dividend policy.
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