ESG Reputational Risk, Corporate Payouts and Firm Value

Ioannis Chasiotis, Dimitrios Gounopoulos, Dimitrios Konstantios, Victoria Patsika

Research output: Contribution to journalArticlepeer-review

2 Citations (SciVal)


This study explores the relationship between ESG reputational risk, corporate payouts and firm value. Using a sample of 2021 US-listed firms between 2007 and 2019, we provide robust evidence that ESG reputational risk relates to higher payouts, and that free cash flows amplify this relationship. Turning to payout composition, we document that ESG reputational risk associates with a payout mix comprising a higher analogy of share repurchases versus dividends; and that this relationship is more pronounced under financial constraints. Furthermore, we show that the market places a premium on payouts from high ESG reputational risk firms. Our findings are in line with the notion that ESG reputational risk represents agency problems and raises financial risk, inducing firms to disgorge cash via a more flexible payout regime. Results are robust to several estimation techniques that address endogeneity, self-selection and censored observations.

Original languageEnglish
Number of pages25
JournalBritish Journal of Management
Early online date8 Jul 2023
Publication statusE-pub ahead of print - 8 Jul 2023

Bibliographical note

Funding Information:
We are grateful to Jawad Addoum, Kyriakos Drivas, Marie Dutordoir, Matt Gustafson, Reynolds Holdings, Emirhan Ilhan, Dimitrios Papanikolaou (Editor of the ), Lase Heje Pedersen, Lukasz Pomorski, George Serapheim, Andrea Tarelli, seminar participants from Politecnico di Milano, the University of Birmingham, University of Cardiff, University of Piraeus and University of York, and conference participants at the Financial Management Association (FMA), the Sustainable Finance and Governance Workshop and the Financial Economics Meeting (FEM 2022) for their helpful comments. We also thank the CLS Blue Sky Blog of Columbia University for valuable feedback. This research is co‐financed by Greece and the European Union (European Social Fund, ESF) through the Operational Programme «Human Resources Development, Education and Lifelong Learning» in the context of the project “Reinforcement of Postdoctoral Researchers – 2nd Cycle” (MIS‐5033021), implemented by the State Scholarships Foundation (ΙΚΥ). Journal of Financial Economics

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation


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