2. Relationship between corporate sustainability performance and brand performance: evidence from Borsa Istanbul

Abstract

Purpose- The purpose of this study is to analyze the relationship between corporate sustainability performance and brand performance. By using brand value as a measure of corporate performance, in this study we focus on the crucial question of whether corporate sustainability performance pays off or not. Methodology- The sample comprised of 63 non-financial companies included in Borsa Istanbul 100 Index between 2014 and 2018. We test our hypotheses by simultaneously estimating the panel logit and panel probit models. We have two models to test the hypothesis. In the first model the dependent variable is the brand performance. Brand performance was proxied through Brand Finance data. In the second model the dependent variable is the corporate sustainability performance. The proxy that we used for the corporate sustainability performance was the membership of BIST Sustainability Index. Findings- Analysis results showed that the sustainability performance, financial performance, firm size, firm age and their involvement in the service sector had a positive impact on brand performance. When the determinants of the corporate sustainability performance of companies were examined, it was seen that brand performance, firm size and their involvement in the manufacturing sector had a positive impact on sustainability performance. Finally, the financial leverage of companies with high brand performance and sustainability performance was also found to be high. Conclusion- The empirical results tend to confirm the positive influence of corporate sustainability performance on brand performance. Further, the findings indicate that companies with a leading level of brand performance have a higher sustainability performance.