Analysis shows firm value is influenced by interpretive uncertainty in ESG performance, suggesting strategic sensegiving mitigates risks for companies.
Key Points
Firm value decreases as ESG investment increases beyond optimal levels, linked to interpretive uncertainty.
The analysis finds that higher philanthropic giving helps maintain firm value despite high ESG scores.
Using panel data from Korean firms, the study examines the complexities of ESG strategies in a cultural context.
Strategic sensegiving may empower firms to communicate ESG benefits effectively, countering diminishing returns.