Vol. 14 No. 1 (2026): Business & Management Studies: An International Journal
Articles

The role of ESG indices on stock market dynamics from a green finance perspective: An ARDL bounds testing approach for Türkiye

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  • İlknur Ülkü Armağan
İlknur Ülkü Armağan
Asst.Prof., Suleyman Demirel University, Isparta, Türkiye

Published 2026-03-25

Keywords

  • ESG Stock Indices, ARDL Bounds Testing Approach, MSCI EM SI, XUSRD, Financial Markets
  • ESG Hisse Endeksleri, ARDL Sınır Testi Yaklaşımı, MSCI EM SI, XUSRD, Finansal Piyasalar

How to Cite

The role of ESG indices on stock market dynamics from a green finance perspective: An ARDL bounds testing approach for Türkiye. (2026). Business & Management Studies: An International Journal, 14(1), 143-161. https://doi.org/10.15295/bmij.v14i1.2690

Copyright (c) 2026 İlknur Ülkü Armağan

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to Cite

The role of ESG indices on stock market dynamics from a green finance perspective: An ARDL bounds testing approach for Türkiye. (2026). Business & Management Studies: An International Journal, 14(1), 143-161. https://doi.org/10.15295/bmij.v14i1.2690

Abstract

This study emphasises the growing importance of Environmental, Social and Governance (ESG) criteria in both global and national financial markets by analysing the short- and long-run relationships between the MSCI Emerging Markets Select Index (MSCI EM SI), the Borsa İstanbul Sustainability Index (XUSRD) and the Borsa İstanbul 100 Index (XU100). The integration of ESG principles into financial markets has transformed how investors assess risk and return, becoming even more critical following recent global crises such as climate change, geopolitical instabilities and the COVID-19 pandemic. Consequently, both international and national ESG indices have emerged as key indicators supporting the transition to sustainable financial assets, especially for developing economies. This study employs an empirical analysis using the ARDL Bounds Testing Approach with monthly closing data for the selected indices. The findings reveal no significant short- or long-run relationship between the MSCI EM SI and the XU100 Index. Conversely, the results indicate that the XUSRD Index exhibits a statistically significant interaction with the XU100 Index in both the short- and long-run.

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