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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 51, No. 5, pp.1221-1241
ISSN: 1226-1874 (Print)
Print publication date 31 Oct 2022
Received 16 Jul 2022 Revised 19 Aug 2022 Accepted 23 Aug 2022
DOI: https://doi.org/10.17287/kmr.2022.51.5.1221

The Effect of ESG on Management Efficiency: Focusing on the Moderating Effect of the Firm Size

Sangpil Yoon ; Dongphil Chun
(First Author) KAIST etona@kaist.ac.kr
(Corresponding Author) Pukyong National University performance@pknu.ac.kr
ESG가 경영효율성에 미치는 영향: 기업규모의 조절효과를 중심으로


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

As the economy and society grow and environmental pollution and social problems emerge, firm’s interest in ESG and sustainable management is increasing. Against this background, corporates are making efforts to disclose their ESG activities, and the government is moving to establish standards and obligations for corporate ESG disclosure. In order to give justification to ESG activities, academia is conducting research to reveal the effect of ESG activities on performance. Therefore, this study analyzed the effect of ESG on management efficiency. For this, the ESG grade of the Korea Corporate Governance Service, DEA, and Tobit regression were used. As a result of the analysis, it was found that the higher the ESG grade, the lower the management efficiency. This negative (-) relationship was moderated in the positive (+) direction as the firm size increased. This means that ESG activities can be negative in terms of efficiency. It also indicates that the impact of ESG may vary depending on the characteristics of the corporate. This study has academic implication in that it extends ESG-related research to the aspect of efficiency. In addition, it has practical implications that factors to consider are provided to policy makers and corporate decision makers.

Keywords:

ESG, Management efficiency, DEA, Tobit regression

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∙ The author Sangpil Yoon is a postdoctoral researcher at the Electronics and Telecommunications Research Institute. He received his Ph.D. in engineering from the School of Business and Technology Management at KAIST. His major research fields include sustainable management, management accounting, performance management, efficiency, and ESG, and he has published papers in SSCI journals such as Technovation and Science & Public Policy.

∙ The author Dongphil Chun is an associate professor in the Department of Management of Technology at Pukyong National University. He is an editor of Korean Business Education review and is one of the directors of Korea Technology Innovation Society and Management Accounting Association Korea. He has been interested in strategic sustainability management, managerial accounting, ESG, R&D performance management, and start-up issues with over 50 papers since 2014.