Exploring the Causal Links between ESG, R&D, and Firm Performance: Evidence from the US Technology and Food Companies

This study examines the causal relationships between ESG (Environmental, Social, and Governance) compliance, R&D expenditures, and financial performance in the technology and food sectors in the US. A panel dataset from 2012 – 2021 from the Thomson Reuters database was analysed for 12 food and 18 technology companies. The findings show that there are different causal relationships between sectors. While R&D investments in the technology sector positively affect firm performance by increasing ESG compliance, firm performance in the food sector directs ESG compliance, encouraging R&D investments. The study emphasizes that sectoral differences should be considered in sustainability and R&D strategies and guides policymakers and managers to develop approaches appropriate to the dynamics of the sector.