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The effects of country governance quality on corporate sustainability and ethical behaviour

datacite.subject.sdg16:Paz, Justiça e Instituições Eficazes
datacite.subject.sdg08:Trabalho Digno e Crescimento Económico
datacite.subject.sdg09:Indústria, Inovação e Infraestruturas
dc.contributor.authorFrancisco, Paulo Morais
dc.date.accessioned2026-06-12T10:00:59Z
dc.date.available2026-06-12T10:00:59Z
dc.date.issued2026-05-11
dc.description.abstractUsing institutional theory, we examine how country governance affects two ESG outcomes: ESG performance and ESG controversies. With Refinitiv/LSEG data for ~146,000 firm‐years in 86 countries (2002–2023) and World Bank WGI, we apply a Mundlak within/between decomposition to test complementarity versus substitution (performance) and prevention versus detection (controversies). Better governance is strongly associated with higher ESG performance—overall and across E, S and G—especially cross‐country. Yet governance also predicts more reported controversies, consistent with detection/visibility rather than worse conduct. Instrumental Variable and DiD tests corroborate these results. JEL Classification: D02, M14, Q56, C23eng
dc.identifier.doi10.1111/eufm.70077
dc.identifier.eissn1468-036X
dc.identifier.issn1354-7798
dc.identifier.urihttp://hdl.handle.net/10400.1/29104
dc.language.isoeng
dc.peerreviewedyes
dc.publisherWiley
dc.relationCenter for Advanced Studies in Management and Economics
dc.relation.ispartofEuropean Financial Management
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectBusiness ethics
dc.subjectControversies
dc.subjectCorporate sustainability
dc.subjectCountry governance
dc.subjectESG performance
dc.titleThe effects of country governance quality on corporate sustainability and ethical behavioureng
dc.typejournal article
dspace.entity.typePublication
oaire.awardNumberUIDB/04007/2020
oaire.awardTitleCenter for Advanced Studies in Management and Economics
oaire.awardURIinfo:eu-repo/grantAgreement/FCT/6817 - DCRRNI ID/UIDB%2F04007%2F2020/PT
oaire.citation.titleEuropean Financial Management
oaire.fundingStream6817 - DCRRNI ID
oaire.versionhttp://purl.org/coar/version/c_970fb48d4fbd8a85
person.familyNameFrancisco
person.givenNamePaulo Morais
person.identifier.ciencia-idCD18-B229-B04B
person.identifier.orcid0000-0001-6632-3097
person.identifier.scopus-author-id56478668900
project.funder.identifierhttp://doi.org/10.13039/501100001871
project.funder.nameFundação para a Ciência e a Tecnologia
relation.isAuthorOfPublication1765bde5-8c14-4c7d-9ce9-5bc93887aeff
relation.isAuthorOfPublication.latestForDiscovery1765bde5-8c14-4c7d-9ce9-5bc93887aeff
relation.isProjectOfPublication2fa5dcac-9207-4f5b-b4be-54fcf7dcdd7d
relation.isProjectOfPublication.latestForDiscovery2fa5dcac-9207-4f5b-b4be-54fcf7dcdd7d

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