Sustainability and Value
Does ESG Increase Stock Prices in the Textile Industry?
DOI:
https://doi.org/10.16930/2237-766220253630Keywords:
ESG, Textile industry, Sustainable investments, Value relevanceAbstract
This study examines the relationship between environmental, social, and governance (ESG) practices and stock prices in the textile sector. Using data from Refinitiv Eikon (2005-2022), the final sample comprises 669 observations from 103 companies. The data were analyzed using panel data models, including Generalized Least Squares (GLS), Panel-Corrected Standard Errors (PCSE), and Two-Stage Least Squares (2SLS). The results consistently show a positive relationship between ESG practices and stock prices, indicating that investors value sustainability. The results show that the social and environmental pillars are particularly significant in explaining higher stock prices This sector is one of the largest environmental polluters while also holding significant economic relevance. In this context, this study addresses a gap in the literature by showing that adopting ESG practices in the textile sector not only increases stock prices but also contributes to its sustainable development. These results provide a solid foundation for investment decisions and corporate strategy formulation.
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