How important a good ESG performance is for GDP per capita? In this paper we examine the economic effect of environmental, social and governance (ESG) performance in 29 OECD countries over the 1996–2014 period, using panel cointegration techniques. The application of cointegration methodology allows distinguishing between long run and short run effects. We find that, while there is a positive
... [Show full abstract] relationship between ESG and GDP per capita in the long run, such relationship does not exist in the short run. However when allowing for heterogeneity in the short term dynamics (Pooled Mean Group), two countries (Iceland and South Korea) benefit in the short run (w.r.t. GDP per capita) from their ESG performance.