Analyzing the Impact of ESG Scores on Financial Performance Using CCEP Estimation: Evidence from Borsa Istanbul

Tülay Tellioğlu; Banu Demirhan

doi:10.2478/sbe-2025-0054

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Analyzing the Impact of ESG Scores on Financial Performance Using CCEP Estimation: Evidence from Borsa Istanbul

Studies in Business and Economics

Volume 20 (2025): Issue 3 (December 2025)

By: Tülay Tellioğlu and Banu Demirhan

Open Access

|Jan 2026

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) practices on firm-level financial performance. Using panel data from selected firms listed on Borsa Istanbul over the period 2004Q1–2024Q2, the analysis employs the Common Correlated Effects Pooled (CCEP) estimator, which accounts for both heterogeneity and cross-sectional dependence. Empirical findings reveal that ESG scores exert no statistically significant influence on financial performance when measured by ROA, yet demonstrate a marginally positive association with Tobin’s Q. Conversely, firm size is found to have a weak but statistically significant positive effect on ROA. These results imply that ESG practices may not translate into accounting-based profitability gains, while they appear to provide limited support for market-based performance, thereby underscoring the nuanced and context-dependent role of ESG in corporate financial outcomes.

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Articles in this issue

DOI: https://doi.org/10.2478/sbe-2025-0054 | Journal eISSN: 2344-5416 | Journal ISSN: 1842-4120

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Language: English

Page range: 261 - 279

Published on: Jan 18, 2026

Published by: Lucian Blaga University of Sibiu

In partnership with: Paradigm Publishing Services

Publication frequency: 3 issues per year

Keywords:

ESG practices,

ROA,

TOBIN-Q,

CCEP

Related subjects:

Business and economics,

Business management,

Management accounting, financial controlling, cost calculation, investment,

Management, organization, corporate governance,

Business development, change management, cooperation,

Entrepreneurship

© 2026 Tülay Tellioğlu, Banu Demirhan, published by Lucian Blaga University of Sibiu
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Volume 20 (2025): Issue 3 (December 2025)