PONE-D-24-22051An Exploratory Study on the Impact of ESG on Business Performance - Focusing on Listed Companies in Korea and TaiwanPLOS ONE

Dear Dr. FAN,

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Reviewers' comments:

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Comments to the Author

1. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1: Yes

Reviewer #2: Yes

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2. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1: I Don't Know

Reviewer #2: No

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3. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1: Yes

Reviewer #2: Yes

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4. Is the manuscript presented in an intelligible fashion and written in standard English?

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Reviewer #1: Yes

Reviewer #2: Yes

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5. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1: It was very interesting reading this paper. Thank you for including me as reviewer. The paper provides a comprehensive analysis of ESG practices and their impact on business performance in Korea and Taiwan. The comparative approach between these two regions, considering their unique economic structures, is particularly insightful and adds significant value to the existing literature on ESG. As I am from Europe, it was very interesting for me to read it but also to know a lot of new things from this part of world. The use of empirical data from the Bloomberg database and the application of Tobin's q ratio as a measure of business performance are commendable methodological choices by my opinion. Overall, this paper makes a significant contribution to the field of ESG and business performance. With some minor enhancements, it has the potential to offer even deeper insights and broader implications for academia and industry practitioners. I encourage researchers to continue in this direction.

Reviewer #2: A well written and thought out paper on non-overlapping vector of ESG factors for Taiwan and Korea. Kindly look at the following few numerical items. Maybe I'm missing a point but perhaps elaborate on these items briefly or address them.

1. In Table 2 (Descriptive statistics), the minimum value for Debt ratio is 0.000. What percentage of your sample is all-equity? (Some of your metrics have 3 decimal places, others have 2 or 1, please make them uniform, in the US 2 is standard).

2. In Table 4 (Model Regression Results), the 95% confidence interval for the Equity variable is incorrectly reported as "-3.758 -0.001". This doesn't match the positive coefficient (0.0503) and p-value (0.002) reported for this variable. Please address this. It's likely a typo. (Some of your metrics have 3 decimal places, others have 4, please make them uniform, in the US 2 is standard).

3. In Tables 5 and 6 (regression results for Korean and Taiwanese firms), different sets of variables are included without explanation. For example, ROA is included in Table 4 but excluded in T5,6. Given that ROE varies widely for Taiwanese firms vs Korean firms, perhaps it could be included (or a brief reason provided, thank you). Also the Titles for T5 and T6 should be very similar, to convey it is a comparative panel table. Pls. standardize decimal length in these tables too. The technological footprint of Kr and Tw could be one of the factors for this ROE divergence. The significance of technology is well highlighted in Dionisio, Marcelo,et al. "Role of digital transformation in improving the efficacy ..."Journal of High Technology Management Research (2023).

4. In Table 7 (Regression Analysis Results of ESG Sub-dimensions), the coefficient for ROE is negative (-0.191), which seems to contradict the positive coefficient (0.045) reported for ROE in Table 4. Also a formal model using equation editor should be listed for T5,6,7 with Tobin's Q as the Dependent variable and others as the X variables.

5. In Table 7, the coefficient for Advertising (0.083) is positive, somewhat contradicting the negative coefficients reported for this variable in previous tables. Or please elaborate on it briefly. It is possible there is factor instability (which is fine), Agrrawal and Clark (2009), attribute factor/coefficient instability to variance discontinuities and note their impact on liquidity of assets "Multivariate Liquidity Score and Ranking Device for ETFs." Academy of Financial Services (2009).

A somewhat larger concern is the way you have narrowed down to 110 or so firms. From your Bloomberg screen [file is attached for reference] I can see that you eliminated companies without a full set of variables. This introduces Survivorship bias, as only the strong and mature companies will remain in existence starting 2017 to 2022. Please elucidate on how you controlled for this issue.

I found this point to be well brought out in the paper: In Taiwan, ESG practices, while emphasizing local culture and community integration, may lead to higher costs and less efficient practices. This response-oriented approach can result in inefficiencies compared to South Korea's more systematic strategy. In contrast to Taiwan, in South Korea, ESG practices are heavily reliant on government guidance and the promotion by large corporations, leading to insufficient participation of SMEs. This dependence reduces market autonomy and innovation drive. The subsequent performance and liquidity impact of these ESG variations can be further researched applying the (Agrrawal and Clark, 2009 process). Additionally Similar studies applying Sharia criterion have been applied to the Australian market [El Saleh and Jurdi. "Stock performance under alternative Shariah screening methods: Evidence from Australia." Accounting & Finance (2021)].

The paper can be streamlined nicely after addressing some of the points and incorporating feedback which will improve visibility as well. Good work, thank you.

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Reviewer #1: No

Reviewer #2: No

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An Exploratory Study on the Impact of ESG on Business Performance - Focusing on Listed Companies in Korea and Taiwan

PONE-D-24-22051R1

Dear Dr. FAN,

We’re pleased to inform you that your manuscript has been judged scientifically suitable for publication and will be formally accepted for publication once it meets all outstanding technical requirements.

Within one week, you’ll receive an e-mail detailing the required amendments. When these have been addressed, you’ll receive a formal acceptance letter and your manuscript will be scheduled for publication.

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Kind regards,

Marcelo Dionisio

Academic Editor

PLOS ONE

Additional Editor Comments (optional):

Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #2: All comments have been addressed

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2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #2: Yes

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3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #2: Yes

**********

4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #2: Yes

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5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #2: Yes

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6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #2: The authors have been very thorough and responsive to technical feedback. It is a very well produced paper.

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7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #2: No

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