Impact of Environmental, Social and Governance (ESG) Performance on Firm Performance in Thailand Stock Exchange: Interaction Effect of Managerial Efficiency

This study aims to use stakeholder-agency theory to investigate the relationship between environmental, social, and governance (ESG) performance and firm performance (measured by ROA and Tobin’s Q) in the Stock Exchange of Thailand (SET), with a particular focus on whether managerial efficiency has a moderating effect on this relationship. The sample for this study comprised all companies listed in the SET from 2016 to 2021, resulting in a total of 2,104 firm-year observations. The PROCESS analysis technique developed by Hayes (2013) was utilized to analyze the data. The study found that there was no significant impact of ESG performance on firm performance. However, when considering managerial efficiency, the relationship between ESG performance and firm performance becomes stronger and positive. This moderating effect of managerial efficiency has been neglected in previous research, making this study a valuable contribution to the ESG literature. These findings indicate that both managerial effectiveness and ESG performance should be viewed as interdependent aspects of effective stakeholder management. Moreover, the study emphasizes the importance of implementing ESG regulations in Thailand to encourage sustainable development.