Size-based and sectoral dynamics of ESG performance: a panel data analysis

The paper examines the impact of firm size and industry type on Environmental, Social and Governance (ESG) performance of 262 listed Indian companies between 2018 and 2022, with a specific focus on an emerging-market context. Using Refinitiv ESG scores, the study employs Panel-Corrected Standard Errors (PCSE) regression to address heteroskedasticity, serial correlation, and cross-sectional dependence in longitudinal ESG data, thereby enhancing the robustness of empirical inference. The findings indicate that larger firms exhibit superior ESG performance due to greater resource availability and stakeholder visibility, while service-sector firms outperform manufacturing firms owing to lower environmental impact and higher transparency. However, the sectoral gap in ESG performance narrows following the adoption of SEBI’s Business Responsibility and Sustainability Reporting (BRSR) framework, highlighting the mediating role of regulatory intervention in shaping corporate sustainability behavior. The study contributes to ESG literature by combining methodological rigor through PCSE estimation with institutional analysis of the Indian regulatory environment, and by extending legitimacy theory to explain how firm characteristics and regulatory mandates jointly influence ESG performance in an emerging economy. The findings offer valuable insights for regulators, managers, and investors seeking to strengthen sustainable corporate governance amid evolving disclosure regimes.