This study examines the impact of ESG scores and political connections on firm stock performance during unstable market periods. High ESG scores enhance a firm’s stock performance, indicating investors recognize ESG factors as indicators of long-term stability. Political connections alone don’t boost a company’s stock return but become significant when combined with leverage. Firms with political connection may substitute sustainable ESG practices with lobbying to mitigate market turbulence.

Link: ESG Score, Firm Political Connections, and Stock Performance During COVID-19