Investigating the Relationship Between ESG Performance and Efficiency in Aircraft Manufacturers

This study examines the relationship between operational efficiency, market efficiency and ESG (Environmental, Social and Governance) performance of publicly traded aircraft manufacturers. As a contribution to the literature, this research provides a novel efficiency analysis of aircraft manufacturers and applies wavelet methodology to the investigation of ESG-efficiency relationships in aviation. For the period 2003¬–2023, manufacturers’ efficiency was analyzed using Window Network DEA, which effectively addresses the limited number of industry decision makers. In the second stage, wavelet analysis was used to examine the relationships between efficiency outcomes and ESG scores, which has the advantage of revealing temporal relationships without requiring cointegration tests. The results show that the correlation patterns between manufacturers' efficiency and ESG scores exhibit temporal variations, with strong correlations (0.7-0.9 coherence) consistently observed over 10–15-year periods. Specifically, strong relationships were found between Airbus' operational efficiency and ESG performance in 3–4-year cycles, and between Boeing's marketing efficiency and ESG performance in the 8–15-year range. These findings suggest that ESG integration requires a long-term strategic approach that goes beyond the short-term focus prevalent in the existing literature. From a managerial perspective, the impact of ESG integration varies across firms depending on factors such as size, market segmentation and operational context, suggesting that ESG strategies should be tailored to specific firm characteristics. This research contributes to the growing aviation sustainability literature by providing unique insights into the long-term relationships between ESG and efficiency in an oligopolistic market.