| Title: | The impact of ESG on business performance : anǂempirical analysis of NASDAQ–NYSE-Listed companies |
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| Authors: | ID Herman, Aljaž (Author)
ID Oplotnik, Žan (Author)
ID Jagrič, Timotej (Author) |
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| Files: |  https://www.mdpi.com/2071-1050/17/21/9683
 RAZ_Herman_Aljaz_2025.pdf (411,40 KB)
MD5: 6952B3A01DCBA52E203742FDC4332A8D
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| Language: | English |
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| Work type: | Scientific work |
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| Typology: | 1.01 - Original Scientific Article |
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| Organization: | EPF - Faculty of Business and Economics
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| Abstract: | This study investigates the relationship between ESG ratings and a firm’s financial performance, focusing on Return on Assets (ROA) and Return on Equity (ROE). Using a combination of stepwise linear regression and feedforward neural networks (FFNN), we assess both the linear and nonlinear effects of ESG on financial performance. The regression models identify ESG as a significant, positively correlated factor in explaining financial performance, alongside firm demographics, sector affiliation, and financial indicators. Neural networks reveal nonlinear dynamics, particularly for ROA, suggesting threshold effects in the ESG–performance relationship. Sensitivity analysis confirms that ESG’s influence strengthens at higher values. Our findings highlight that ESG is not only statistically relevant but also interacts with firm characteristics in complex ways. These results contribute to the ongoing discourse on sustainable finance by showing that ESG can be a meaningful driver of financial outcomes, especially when modeled through nonlinear approaches. |
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| Keywords: | ESG, financial performance, ROA, ROE, regression, neural network |
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| Publication status: | Published |
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| Publication version: | Version of Record |
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| Submitted for review: | 28.08.2025 |
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| Article acceptance date: | 28.10.2025 |
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| Publication date: | 30.10.2025 |
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| Year of publishing: | 2025 |
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| Number of pages: | str. 1-17 |
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| Numbering: | Vol. 17, issue 21, [art. no.] 9683 |
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| PID: | 20.500.12556/DKUM-95904  |
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| UDC: | 005.9 |
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| ISSN on article: | 2071-1050 |
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| COBISS.SI-ID: | 256244995 |
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| Publication date in DKUM: | 06.11.2025 |
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| Views: | 200 |
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| Downloads: | 13 |
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| Metadata: |    |
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| Categories: | Misc.
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