TITLE:
ESG Performance and Corporate Profitability in the Emerging Market Agri-Food Sector: A Dynamic Panel Data Analysis
AUTHORS:
Pandora P. Nika, Kanellos S. Toudas
KEYWORDS:
ESG Pillars, Agri-Food Sector, Emerging Markets, Corporate Financial Performance, Pretax ROA, System GMM, Refinitiv EIKON, Institutional Quality
JOURNAL NAME:
Theoretical Economics Letters,
Vol.16 No.5,
October
26,
2026
ABSTRACT: This paper investigates the dynamic relationship between Environmental, Social, and Governance (ESG) performance and corporate financial metrics within the agri-food sector in emerging economies. Utilizing a balanced panel dataset spanning a ten-year period (2014-2023), we examine the 35 market-leading agri-food enterprises operating across seven key emerging markets in Asia, Latin America, Africa, and the Middle East, using data retrieved from the Refinitiv EIKON database. To address potential endogeneity, unobserved heterogeneity, and dynamic panel bias, we employ a System Generalized Method of Moments (System GMM) estimation framework (Arellano-Bover/Blundell-Bond), supplemented by Fixed Effects estimations with HC3 robust standard errors and non-linearity checks. Our empirical results evaluate the individual and combined effects of the ESG pillars (Environmental, Social, Governance) and ESG Controversies on corporate profitability metrics, specifically Pretax Return on Assets (Pretax ROA) as well as operational efficiency (Asset Turnover) and financial structure (Leverage). Furthermore, we account for the moderating role of country-level institutional quality and external shocks, such as the global health crisis. The findings offer nuanced theoretical insights for Stakeholder Theory and the Resource-Based View within institutional voids, while providing practical guidance for agri-food executives, institutional investors, and policymakers in developing regions.