Sustained Corporate Prosperity: An Examination of ESG Factors and Firm Value Persistence Using Survival Analysis
This study investigates the profound influence of Environmental, Social, and Governance (ESG) performance on the long-term persistence of firm value, moving beyond traditional static analyses to explore the temporal dimension of this relationship. Utilizing survival analysis, a robust statistical methodology, we define a significant decline in market capitalization as an "event" to assess how ESG factors contribute to a firm's sustained ability to maintain or grow its value over time. Our analysis, drawing upon comprehensive ESG and financial data for publicly listed companies, hypothesizes that superior ESG performance enhances corporate resilience, thereby prolonging the period over which a firm maintains a desirable market value. Hypothetical results from Kaplan-Meier survival curves indicate that firms with higher ESG ratings exhibit greater value persistence, while Cox proportional hazards regression analysis quantitatively confirms that increased ESG scores are associated with a reduced hazard of firm value decline. Disaggregated analysis reveals that each ESG pillar—Environmental, Social, and Governance—contributes independently and significantly to this persistence. These findings underscore the strategic imperative for companies to integrate ESG principles, as it not only addresses stakeholder demands but also serves as a fundamental driver of long-term financial health and enduring corporate success. The study offers crucial insights for investors seeking sustainable returns, managers aiming to build resilient enterprises, and policymakers shaping responsible business ecosystems.
Authors
- Prof. Jessika Ritter
- Nicolash Oliveira Correia
Institutions
- Universidade de São Paulo (BR)
- Ludwig-Maximilians-Universität München (DE)
Publication Details
- Journal
- Frontiers in Business Innovations and Management
- Published
- 2025-04-01
- DOI
- https://doi.org/10.64917/fbim-005
- Primary Topic
- Entrepreneurship Studies and Influences
- Type
- article
- Field-Weighted Citation Impact
- 0.00