CEF.UP – WiP Seminar
Wednesday – May 21st, 2025 at 13:00h | Room 305
Machine learning and business growth: the impact of ESG practices
Sandra Marnoto – cef.UP, NECE and University of Maia.
Abstract:
“Growth is essential for Businesses long-term success, allowing the improvement of market position and profitability. ESG (Environmental, Social, and Governance) practices are fundamental in this process, strengthening customer reputation and loyalty, which drives competitive performance. With globalization, global value chains (GVCs) become essential for business growth, allowing access to new markets and cost reduction. Aligning ESG practices with participation in these chains is vital for sustainable growth and innovation. This study investigates the impact of ESG practices on business growth, focusing on how inclusion in global value chains (GVCs) moderates this relationship. The main objectives of the research are to assess how ESG practices influence the growth of companies and how integration into GVCs affects this dynamic. To achieve the objectives, the methodology used includes a combination of machine learning algorithms, such as Linear Regression, Random Forest, Gradient Boosting Machine, Support Vector Regression and Neural Networks, allowing to capture complex interactions between variables. The dataset used in the study is the Flash Eurobarometer 486, entitled “SMEs, Start-ups, Scale-ups, and Entrepreneurship”, conducted by the European Commission in 2020 and covers companies from all Member States, as well as 13 other countries, totaling 14,554 companies distributed across different sectors and regions. The results show that the governance dimension (G) has a significant impact on the growth of companies, as well as social practices (S). Environmental practices (E) have a less significant effect. In addition, inclusion in global value chains does not moderate the influence of ESG practices, so regardless of whether or not the company is part of a global network of suppliers and customers, ESG practices maintain the level of influence on business growth.”