<![CDATA[Purpose - This study examines whether a parsimonious indicator-based aggregate sovereign environmental, social, and governance (ESG) proxy (hereafter, aggregate ESG) is associated with private-credit expansion in Asian economies and distinguishes within-country from between-country associations. Methods - The analysis uses 444 country-year observations from 38 Asian economies during 2011-2022. Private-credit expansion equals one when bank private credit-to-gross domestic product (GDP) exceeds its preceding-year value. Lagged aggregate ESG and its Environmental, Social, and Governance pillars are decomposed using a Mundlak correlated-random-effects logit with year effects and country random intercepts. Robustness analyses include generalized estimating equations (GEE) with a first-order autoregressive [AR(1)] working correlation, a balanced panel, conditional fixed-effects logit, material expansion, alternative aggregation rules, expanded macrofinancial controls, and a continuous credit-change outcome. Findings - Aggregate ESG is positively associated with private-credit expansion within countries (odds ratio [OR] = 126.519; p = 0.004) and between countries (OR = 3.050; p = 0.016) in the baseline model. The within-country aggregate association remains positive under alternative aggregation rules and expanded-control sensitivity analyses, whereas pillar-level results are more heterogeneous and specification-sensitive. Formal within-between contrasts do not establish statistically different associations. Results for the continuous magnitude of credit change are not significant. Research implications - The evidence concerns a parsimonious indicator-based aggregate sovereign ESG proxy and the probability of private-credit expansion; it does not identify causal effects of reforms, credit quality, the magnitude of lending growth, or a comprehensive sovereign ESG rating. Originality - The study contributes an event-based credit outcome and simultaneous within-country and between-country estimation in a heterogeneous Asian sample.]]>
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