Optimizing performance through sustainability: the mediating influence of firm liquidity on ESG efficacy in African enterprises

Abstract

This study employs a linear regression model to investigate the relationship between ESG performance, liquidity, and firm performance of African-listed firms covering a period from 2013 to 2022. The results indicate that liquidity is a significant mediating factor influencing the association between ESG performance on firm performance. Furthermore, the outcome suggests that augmenting the ESG performance of listed companies enhances firm performance. Robustness tests also corroborate the postulation that firms with higher liquidity improve ESG performance and enhance overall firm performance. This study offers important insights to corporate governors, listed firms, and investors.

Keywords

• ESG
• Africa
• firm performance
• liquidity
• environmental disclosures
• social