The Impact of ESG-Score on Turnover Growth : A Cross-Sectional Study of US IPOs

University essay from Umeå universitet/Företagsekonomi; Umeå universitet/Företagsekonomi

Abstract: This thesis study is based on the research question ‘Does ESG-scores affect turnover growth in companies with recent IPOs in the US?’. With four multiple regression models, we tested our hypotheses. Additionally, we made a box-plot analysis to look for trends between groups of companies, where the groups were constructed based on ESG-scores. We believe that we came up with a, yet vague, answer to the question after analyzing the results of the research. For the companies in the sample, ESG-scores do affect Turnover Growth negatively, however we want to stress that we claim it with great caution, as it cannot be concluded with any statistical significance. This study also shed some light on whether or not a manager should spend time and resources, after initiating an IPO in the US, on implementing sustainability in their business model to achieve a high ESG-score to satisfy the demands of the higher number of stakeholders which comes with going public. Conclusively, and generally, we found that a manager should focus strictly on financial performance rather than both financial- and sustainability performance closely following the initiation of an IPO in the US.

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