Machine Learning, Corporate Innovation Culture and ESG Performance in Emerging Markets
1 : Chulalongkorn University (THAILAND)
Phayathai Rd. Phatumwan. Bangkok. -
Thailand
2 : The University of Western Australia
3 : Sasin School of Management, Chulalongkorn University
(Sasin)
Sasa Pathasala, Soi Chula 12, Pathum Wan, Bangkok 10330 -
Thailand
4 : SASIN School of Management, Chulalongkorn University
Using Li et al.'s (2021b) culture dictionary, developed through word embedding machine learning, we study the impact of corporate innovation culture on the ESG performance of firms. We focus on Thai's companies, since Thailand's unique economic and cultural contexts provide key insights into how innovation culture affects ESG performance in emerging markets. Consistent with the institutional, stakeholder and legitimacy hypotheses, we find that a one-unit standard deviation increase in innovation culture is significantly associated with 21.1% rise in ESG scores. This finding, robust across various econometric tests, underscores the importance of innovation culture in shaping corporate sustainability in emerging markets