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The Impact of the Green Wave on the Financial Performance of the Shipping Industry
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Chung, Alex, Tsai, Feng-Ming, Ho, Tzu Ya
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2025-07-23
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Chen_SzuYu.pdf
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The effectiveness of ESG ratings in forecasting financial and market outcomes within carbon-intensive industries remains a contested issue. The shipping sector, characterized by high carbon emissions, capital intensity, and strict regulatory pressure, provides a relevant context to examine whether ESG scores carry predictive value. However, empirical studies in this domain are still limited, with inconsistent results and concerns over measurement validity. This study therefore aims to investigate whether ESG Risk Scores can meaningfully explain variations in cost efficiency, stock performance, and risk exposure among publicly listed shipping companies in the United States. To address this question, a multi-stage empirical design is adopted. The analysis begins by assessing whether ESG scores reflect actual environmental and risk data. It proceeds with regression models to test direct financial effects, followed by a two-stage residual model to evaluate potential indirect mechanisms. Heterogeneity tests and Logit regressions are also employed to capture market reactions to ESG deterioration events. This multi-model structure is not merely to expand analytical coverage, but to mitigate biases from single-model assumptions and ensure the robustness of findings through cross-validation. Preliminary results suggest that ESG scores are modestly associated with financial performance but demonstrate selective effectiveness in triggering market responses, particularly under specific risk conditions. The findings highlight a conditional rather than universal role of ESG metrics in carbon-intensive sectors. This research contributes by clarifying the applicability boundaries of ESG ratings and offers practical implications for investors, policymakers, and rating agencies operating in high-emission industries.
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Chen, S.-Y. (2025). The impact of the Green Wave on the Financial Performance of the Shipping Industry (Master’s thesis, SUNY Maritime College). SUNY Open Access Repository.