The Impact of ESG Factors on Firm Market Capitalization in Developed and Emerging Economies: Evidence from Italy and Russia

his thesis examines the impact of Environmental, Social, and Governance (ESG) factors on firm market capitalization in the context of developed and emerging economies, using Italy and Russia as representative case studies. Drawing on firm-level panel data from 2019 to 2024 and ESG ratings sourced from LSEG Refinitiv, the analysis estimates a linear regression model that includes lagged ESG scores and a firm size control (logarithm of total assets). The empirical framework is designed to assess the individual influence of each ESG pillar—environmental, social, and governance—on firm valuation. To ensure statistical validity, the model is corrected for heteroskedasticity and autocorrelation using robust (White) and HAC (Newey–West) standard errors. The results indicate that ESG factors are more consistently and significantly associated with market capitalization in Italy than in Russia. In particular, the Social pillar shows a positive and statistically significant effect in both countries, while the Environmental and Governance dimensions are significant only in the developed-market setting. The findings highlight the asymmetry of ESG effects across institutional contexts and confirm that sustainability performance is more likely to be capitalized by investors in mature economies. By disaggregating the ESG construct and applying a cross-country comparative design, this research contributes to the growing empirical literature on the financial relevance of sustainability metrics and provides evidence for the contextual dependence of ESG valuation.