Aligning ESG with Firm Value: The Conditional Impact of ESG on Family-Controlled Businesses
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Abstract
This study examines how environmental, social, and governance (ESG) practices influence firm performance in Thai family-controlled firms, which represent a dominant ownership structure in emerging markets. Using panel data from 2012–2021 and drawing on the Agency Theory Type II along with the Socioemotional Wealth perspective, the analysis shows that ESG engagement does not improve firm value in a uniform manner. Instead, family firms display a U-shaped pattern in which performance weakens when ESG involvement is minimal but strengthens once ESG commitment reaches a meaningful threshold. The results also show that ESG practices help firms withstand the COVID-19 crisis by providing resilience during periods of systemic disruption. Overall, the findings suggest that only substantive and well-integrated ESG initiatives contribute to long-term value creation in family-owned enterprises operating in emerging-market environments, while superficial or symbolic efforts do not deliver performance benefits.
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