International Trade Agreements and Corporate Sustainability Performance in Austria, Germany and Switzerland

The paper examines whether exposure to international trade agreements is associated with firm-level ESG performance and whether the answer depends on model specification. A balanced panel of 30 firms headquartered in Austria, Germany and Switzerland is observed annually from 2015 to 2025, giving 330 firm-year observations. Panel regression on an observed ESG composite and structural equation modelling with a latent ESG factor are combined, and the trade path is re-estimated across a crossed design of measurement framework and covariate set. Trade agreement exposure is positively associated with ESG performance in both frameworks under the reduced covariate set and in neither once institutional and firm-level controls enter. The sample is purposive and confined to large listed firms. The association is thus specification-dependent as opposed to measurement-dependent, which explains conflicting results in the literature.