Abstract

This thesis studies the impact of Environment, Social, and Governance (ESG) performance on firm financial performance, measured by net income, across Austria, Belgium, France, Germany, the Netherlands, Switzerland and Luxemburg during 2010-2024. Using fixed effect regression, the study investigates the moderating role of firm size across eleven industries, including basic materials, consumer discretionary, consumer staples, energy, financials, health care, industrial, real estate, technology, telecommunications and utilities. The findings show that ESG performance have asymmetric impact on firm profitability, with larger firms experiencing stronger and more significant positive effects. Sectoral analysis reveals variations across industries, with positive effects concentrated in financial, healthcare, and industrial sectors, while other sectors exhibit weaker or negative outcomes. Comparison of Incumbent firms and new entrants shows that ESG-related financial benefits are stronger for new entrants, which entered the market in the post-pandemic period. To ensure the robustness of the results, a two-stage least squares (2SLS) approach is employed, the findings support the main results, confirming the size dependent effect of ESG performance on firm profitability

School

School of Business

Department

Economics Department

Degree Name

MA in Economics

Graduation Date

Winter 2-15-2026

Submission Date

1-10-2026

First Advisor

Mina Ayad

Committee Member 1

Mohamed Bouaddi

Committee Member 2

Wael Abdallah

Extent

35 p

Document Type

Master's Thesis

Institutional Review Board (IRB) Approval

Not necessary for this item

Disclosure of AI Use

No use of AI

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Available for download on Sunday, January 10, 2027

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