Integration of ESG criteria and corporate value creation: a longitudinal panel data study in Latin American stock markets
DOI:
https://doi.org/10.5281/zenodo.23420863Keywords:
ESG criteria, corporate value, panel data, Latin American stock markets, narrative reviewAbstract
This narrative review article analyzes the integration of Environmental, Social, and Governance (ESG) criteria and their impact on corporate value creation within Latin American stock markets, using empirical evidence from longitudinal panel data studies. Through a critical review of the academic literature, the research addresses the conceptual evolution of corporate sustainability and contrasts the region's structural particularities—such as high ownership concentration, a scarcity of standardized data, and institutional frictions—with those of developed economies. It also examines how advances in methodological specifications, such as system-generalized moment estimators, seek to mitigate endogeneity when assessing the nexus between ESG performance and financial metrics such as Tobin's Q or stock market returns. The findings reveal a divided body of literature, with positive, neutral, and mixed effects, where initial implementation costs and the institutional context act as key moderators. Finally, the practical implications for executives and institutional investors are discussed, demonstrating that, despite regional barriers, sustainability is gradually consolidating as a strategic driver of long-term value and outlining future lines of research on green taxonomies and the energy transition.
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