ESG Relationship with GDP Per Capita; A Panel Study of India

Abstract

A strong ESG performance plays a crucial role in determining the GDP per capita. The primary aim of this research paper is to examine the influence of Environmental, Social, and Governance (ESG) factors on the Gross Domestic Product (GDP) per capita. The sample period of this research paper is from 2014 to 2023. The analysis has been performed on the Indian non-financial sector. The firms listed on Indian stock exchange is selected for this study. The data for this study has been collected from Thomson Reuter DataStream and World Governance Indicator (WGI). The study's dependent variable is the Gross Domestic Product (GDP) per capita. The independent variable covers characteristics concerning to the environment, social aspects, and government. This study significantly and drastically heightened the current knowledge base by considering the governance elements at national level, rather than at the individual firm level. The empirical evidence and results suggest that environmental, social, and governance factors have a favorable and enhancing influence on GDP per capita. The study's results signify a vital addition to the current knowledge and suggest direction to investors and policy makers about the importance and significance of non-financial performance in encouraging economic growth. The investors must consider the non-financial aspect for economic growth.