ABSTRACT This study examines how Environmental, Social, and Governance (ESG) initiatives influence firm efficiency in Taiwan's network communication industry. It specifically pays attention to the moderating effect of organizational agility. Using a two‐stage Dynamic Network Slack‐Based Measure Data Envelopment Analysis and regression analysis for 2017–2022, the study distinguishes between sustainability and market efficiencies. Findings reveal that ESG dimensions exert asymmetric effects across performance domains. Environmental pillar is positively associated with market efficiency but not sustainability efficiency, suggesting that environmental initiatives are recognized by investors but do not generate immediate operational gains. Conversely, social and governance pillars show no significant effects, indicating that their benefits may be indirect or delayed. In contrast to conventional expectations, organizational agility negatively moderates the relationship between the environmental pillar and both efficiency measures, suggesting that excessive flexibility may undermine long‐term environmental investments. Therefore, it challenges the view of agility as a universally beneficial dynamic capability. The study contributes by demonstrating that ESG effectiveness depends on performance domain alignment and that organizational capabilities such as agility can act as constraints rather than enablers. Managerially, the results caution against overemphasizing flexibility at the expense of long‐term sustainability strategies. This study advances ESG–efficiency research by showing that the effectiveness of sustainability strategies depends not only on what firms do but also on how their internal capabilities are aligned with the temporal nature of those strategies.
Lu et al. (Thu,) studied this question.
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