Consumers’ reaction to corporate ESG performance: Evidence from store visits

Consumers’ reaction to corporate ESG performance: Evidence from store visits

Using micro-level data on consumer shopping behavior, this paper investigates end-consumers’ attitudes toward firms’ ESG behavior, and as importantly, the ability of consumers to affect firms’ policy concerning sustainability issues. We find that consumers care about firms’ approach toward ESG, and...

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Bibliographic Details
Main Authors: LI, Frank Weikai, MICHAELY, Roni
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2023
Subjects:
ESG
Corporate Sustainability
Consumer Demand
Cash Flows
Big Data
Environmental Sciences
Finance and Financial Management
Sales and Merchandising
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/7359
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8358/viewcontent/SSRN_id4584361.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:Using micro-level data on consumer shopping behavior, this paper investigates end-consumers’ attitudes toward firms’ ESG behavior, and as importantly, the ability of consumers to affect firms’ policy concerning sustainability issues. We find that consumers care about firms’ approach toward ESG, and consumers’ behavior can impact firms’ attitudes. Using ESG incidents as a proxy, we find that the reduction in store visits is more pronounced for ESG-conscious consumers, such as those living in democratic counties, and counties with a higher fraction of educated and younger residents. Online shopping interest data yields similar results. Using abnormally hot temperature as a shock to residents’ awareness of sustainability issues, we show the effect is plausibly causal.

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