Impact of Social Capital on ESG Management and Corporate Performance with the Moderating Effect of Market Turbulence

Purpose - This study aims to identify the importance of social capital as a critical factor in ESG management. In addition, market turbulence aims to determine some moderating effect between ESG management and corporate performance. This study examines how companies improve corporate performance locally through ESG management regarding social capital. Design/Methodology - This study leverages social capital theory and stakeholder theory to build research models. This paper also analyzes the companies in coastal areas of China. Three hundred and twenty-five questionnaires were collected, analyzed, and applied to the structural equation model. In addition, some case analyses of Korean companies were used. Findings - The findings of this study were as follows. First, all three dimensions of social capital (structural, relational, and cognitive capital) positively affected corporate performance. Structured capital and cognitive capital have positive impact on ESG management. On the other hand, relational capital has no positive impact on ESG management. In addition, “market turbulence” has had a positive moderating effect on ESG management and corporate performance. Originality/value - These findings contribute academically, provide important practical implications for various stakeholders, including business people and governments, and enrich the current understanding of ESG management and social capital.