Table 4.

ESG Practices and SME financial performance (ROA)

VariablesModel 1Model 2Model 3Model 4
ESG score (t–1)0.031**
Environmental score (t–1)0.028**
Governance score (t–1)0.009
Social score (t–1)0.012
Firm size0.014**0.015**0.014**0.014**
Leverage–0.067***–0.066***–0.068***–0.067***
Firm age0.0020.0020.0010.002
Firm FEYesYesYesYes
Year FEYesYesYesYes
Observations2,8502,8502,8502,850
Adjusted R²0.190.180.170.17
Note(s):

***, ** denote significance at the 1% and 5% levels, respectively. (Standard errors clustered at the firm level)

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