ESG uncertainty and corporate capital investment behavior: the mediating role of environmental expenditures
DOI: https://doi.org/10.3846/jbem.2026.26691Abstract
This study investigates the impact of SUS on CIN, with a specific focus on the mediating role of ENX. Utilizing a panel dataset of firms spanning the period from 2010 to 2022, the study employs the fixed effects model (FEM), 2SLS, and the system generalized method of moments (GMM) to ensure robust estimation and address potential endogeneity concerns. The findings reveal that SUS harms CIN, suggesting that firms facing heightened ESG uncertainty are more cautious in their capital allocation. Moreover, the results confirm that ENX plays a mediating role, as firms tend to increase environmental expenditures in response to higher ESG uncertainty, which in turn reduces their capital investment. The study provides valuable social and practical implications. From a social perspective, it underscores the importance of stable and transparent ESG policies in mitigating uncertainty and promoting sustainable investment practices. Practically, firms should balance their environmental expenditures and investment strategies to ensure long-term financial stability. The study’s novelty lies in integrating ESG-related uncertainty with CIN decisions through the mediating role of environmental expenditures, offering a fresh perspective on how firms respond to ESG-related risks in capital allocation.
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capital investment, environmental expenditures, ESG-related uncertainty, sustainable finance, BRICS, corporate financeHow to Cite
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Copyright (c) 2026 The Author(s). Published by Vilnius Gediminas Technical University.
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