Exploring the Relationship between Financial Performance Indicators, ESG, and Stock Price Returns: A Rough Set-based Bipolar Approach

Kao Yi Shen

doi:10.31181/dma21202434

Authors

Kao Yi Shen Department of Banking and Finance, Chinese Culture University, Taipei, Taiwan https://orcid.org/0000-0001-6659-2684

DOI:

https://doi.org/10.31181/dma21202434

Keywords:

Rough Set Theory (RST), DEMATEL, ESG, Multiple Criteria Decision-Making (MCDM)

Abstract

Using a Rough-Set-based approach, this study investigates the connection between financial performance, Environmental, Social, and Governance (ESG) factors, and stock returns. It analyzes data from various companies and industries to examine how ESG metrics interact with financial indicators to influence stock prices. Those findings underscore the importance of considering financial and ESG factors when evaluating a company's performance and market valuation. The Rough-Set-based bipolar model comprises eight decision rules, and the DEMATEL (Decision-Making Trial and Evaluation Laboratory) analysis reveals the influence relationship among the core attributes. Furthermore, the ranking result, based on the bipolar model, is consistent with the market returns, which suggests the validity of this study.

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