Re-examining the Moderating Role of Business Ethics on the Corruption Risk– ESG Nexus: A Global Perspective

Abstract

Manuscript type: Research paper
Research aims: This study re-examines the corruption-ESG nexus and
tests the universality of business ethics as a moderating mechanism
globally.
Design/Methodology/Approach: Quantitative analysis employs 7,252
firm-year observations from MSCI across the Americas, Europe, and
Asia-Pacific for the period 2021–2023, using fixed-effects panel regression.
Research findings: Corporate corruption risk significantly degrades ESG
ratings. However, contrasting prior regional studies, business ethics fails
to moderate this relationship globally or within major economic regions.
Theoretical contribution/Originality: The study challenges the universal
“shielding” effect of ethics, offering empirical support for policy-practice
decoupling in global governance.
Practitioner/Policy implications: Investors are cautioned against relying
on ethical scores as insurance against corruption; formal policies do not
mitigate reputational damage without substantive implementation.
Research limitation: Reliance on standardised MSCI data may overlook
specific cultural nuances.