The impact of ESG Scores in Firm Valuation: Emerging markets in Eastern Europe.

Purpose: This paper investigates if the value of the firms listed in the stock exchanges from emerging financial markets in Central and Eastern Europe is affected by CSR decisions, as measured through ESG scores over the period 2000-2022. Methodology: This paper follows the methodology followed in previous research conducted by the authors, expanding the pool of countries being analyzed, providing a more complete picture of the impact of ESG classification in firm value in a more diverse context of financial market development. We extend the base Ohlson (1995) valuation model, including not just ESG information (the global ESG score, as well as the scores for the individual pillars, Environmental, Social and Governance), as well as including other control variables. Results: Overall findings show that investors do not include this information in the valuation of these firms, even in Environmental Sensitive Industries, as the impact of these variables are not statistically significantly different from zero. Several robustness checks were run, and the results were confirmed. Additional research is suggested in order to determine any factors specific to this group of countries that could extract more information from the regressions. [ABSTRACT FROM AUTHOR]