Do Sustainable Operations through Energy Effectiveness Reduce Cost of Debt in Medium and High-tech Industries? Evidence from an Emerging Economy

The environmental damage phenomenon is a challenge for businesses today, including for small and medium industries in developing countries, such as Indonesia. Green innovation is a solution to answer public concerns over global environmental issues. However, the Small and Medium Enterprises (SMEs) sector generally still focuses on achieving their economic performance. Green innovation is a strategic step for SMEs to increase sustainability and financial performance in the global market. This study aimed to holistically identify the antecedents and consequences when implementing green innovation in SMEs. This study also analyzed the role of green innovation as a mediator in the relationship between intellectual capital, sustainability performance, and financial performance. The survey was conducted on 336 SMEs in Bali, Indonesia. The questionnaire was directly distributed to owners or managers of SMEs over three months. This study proved that intellectual capital positively increased green innovation, SME sustainability, and financial performance. Green innovation was also considered as a mediating variable in the relationship between intellectual capital, sustainability performance, and financial performance. Thus, the implementation of green innovation directs entrepreneurs to fulfill not only social and environmental responsibilities but also encourages SMEs to achieve their economic benefits.

The paper presents the Business Climate Indicator (BCI) in the Russian manufacturing including the medium and high-tech (MHT) manufacturing industries. The authors explain the feasibility of a new alternative measure that summarizes common information of business tendency surveys cleared up of specific fluctuations in individual variables, and give arguments to prove its effectiveness. The resulting BCI reflects the quantitative changes in manufacturing growth more accurately and with a lead compared to the traditional confidence indicator. Identification of the BCI cyclic profile and its visualization through a tracer demonstrate all significant waves of manufacturers’ optimism and pessimism for the period from January 2005 to January 2019. To construct BCI-MHT, the units of observation and the input information are divided into three groups according to the technological level of industries. The dynamics of BCI-MHT is close to those of BCI; however, during the protracted recession in 2016-2018, the sentiments of manufacturers of medium- and high-tech products were less pessimistic compared with the sentiments of all manufacturers.

Sustainability performance is the achievement of an organization in economic, environmental, and social dimensions by considering the interests of stakeholders. Achieving a high sustainability performance is a challenge for not only large industries but also Small and Medium Industries (SMIs). In order to achieve high sustainability performance, an organization needs to innovate in its operations, especially in activities related to the environment, employees, society, and ethics. Conducting innovation needs resources, both financial and nonfinancial, which are very limited in the SMIs. To overcome the problem of limited resources, SMIs can implement open innovation that utilizes both internal and external resources. Open innovation has three types of practices which are inbound, outbound, and coupled. This study aims to identify the relationship between the three open innovation practices and sustainability performance in the SMIs. The respondents of this study are 125 SMIs which produce batik in Indonesia. The model is tested using the partial least square. The result shows a significant relationship between inbound open innovation and economic and environmental performance; outbound open innovation and environmental and social performance; and coupled open innovation and social performance.

This study investigates the impact of halal marketing and competitive pressure, mediated by halal certifying bodies, on halal supply chain management and the sustainability performance of local halal culinary small and medium industries (SMIs) in West Sumatra, Indonesia, which are pivotal to the region’s tourism sector. Employing a quantitative research design, this research used data from 127 certified local culinary SMIs across 18 cities and regencies as samples, collected through non-probability sampling techniques. Data analysis was performed using SmartPLS 4.0. The results revealed that both halal marketing and competitive pressure significantly positively influenced sustainability performance and the effective management of halal supply chains. Moreover, halal certifying bodies were found to play a crucial mediating role, yielding a positive and significant impact on sustainability performance in the context of effective halal supply chain management. These results highlighted the critical interplay between halal marketing strategies, competitive dynamics, and certification processes in promoting sustainability among culinary small and medium industries (SMIs) in developing countries, with a particular focus on Indonesia. The results underscored the significance of these interrelations in enhancing the sustainability of culinary SMIs. By analyzing the unique challenges and opportunities involved, this research contributes to the growing body of literature on halal business practices, offering insights to inform policy-making and strategic decision-making for stakeholders in the halal industry.

International mergers and acquisitions (M&As) have been increasingly used by emerging market enterprises (EMEs) as a springboard for strategic assets to overcome latecomer disadvantages and build sustainable competitive advantages. While current literature only focuses on the M&As’ impacts on acquirers, little is known about the impacts of EMEs’ international M&As on their external stakeholders, such as rival firms. Based on the longitudinal data covering 325 large international M&As completed by Chinese public manufacturing firms during 2009–2015, empirical results show that international M&As at the industry level have significant negative influence on the sustainable performance of acquirers’ rivals, and these negative relationship will be accentuated when the international M&As are horizontal M&As, when rivals are carrying out cost leadership strategy, and when those M&As are completed in the high-tech industry. This study enriches the literature of international M&As and the economic pillar of sustainability by pushing current research toward rival’s perspective and denotes that firms need to consider the potential negative impact on the sustainability of their outside stakeholders (e.g., other firms and whole industry). It also generates practical implications for firms to actively deal with potential negative effects of competitors’ international M&As on their sustainable performance, especially those players in the high-tech industry.

Despite the current drop in price, many fossil fuel resources are becoming increasingly scarce and their consumption is associated with climate change and harmful effects on ecosystems and human health. At the same time, population growth and corresponding pressures on natural resources have risen beyond safe ecological limits. In response to these societal challenges, countries have adopted ambitious global goals such as the 2°C limit to global warming, the Aichi Biodiversity Targets, and the Sustainable Development Goals. However, this unprecedented global awareness has yet to be matched with appropriate action towards achieving these goals and targets. An increasing number of countries look to the bio-economy as a strategy to reduce reliance on fossil fuel and enable sustainable development through a "biologization" of the regular economy. At global scale, however, bio-economies are diverse with sectors, such as agriculture, forestry, energy, chemicals & pharmaceuticals as well as science and education. We thus also expect large variation in the factors driving sustainability outcomes of bio-based development strategies and the appropriate strategies to promote them. In this study, we develop a typology of bio-economies based on country-specific characteristics. We describe five different bio-economy types with varying degrees of importance of the primary and the high-tech sector. While the importance of the high-tech sector is mirrored by the availability of skills, the importance of the primary sector for the national economy is apparently not dependent on the amount of bioproductive land but rather determined by lower levels of skill availability. In terms of sustainability performance, indicators suggest that diversified high-tech economies have experienced a slight improvement especially in terms of resource consumption and material footprints. Levels remain however at the highest levels compared to all other types with large amounts of resources and raw materials being imported from other countries, especially for non-food purposes. Increased competition between food, energy and the environment can push innovations for more efficient use of land, biomass and other resources but it can also increase imports of biomass, especially primary raw materials and associated externalization effects of environmental costs. In an increasingly telecoupled world, these results highlight the following priorities for sustainable development: the necessity of developed high-tech bio-economies to further decrease their environmental footprint domestically and internationally and the importance of biotechnology innovation transfer after critical and comprehensive sustainability assessments.

An increasing number of countries develop bio-economy strategies to promote a stronger reliance on the efficient use of renewable biological resources in order to meet multiple sustainability challenges. At the global scale, however, bio-economies are diverse, with sectors such as agriculture, forestry, energy, chemicals, pharmaceuticals, as well as science and education. In this study, we developed a typology of bio-economies based on country-specific characteristics, and describe five different bio-economy types with varying degrees of importance in the primary and the high-tech sector. We also matched the bio-economy types against the foci of their bio-economy strategies and evaluated their sustainability performance. Overall, high-tech bio-economies seem to be more diversified in terms of their policy strategies while the policies of those relying on the primary sector are focused on bioenergy and high-tech industries. In terms of sustainability performance, indicators suggest that diversified high-tech economies have experienced a slight sustainability improvement, especially in terms of resource consumption. Footprints remain, however, at the highest levels compared to all other bio-economy types with large amounts of resources and raw materials being imported from other countries. These results highlight the necessity of developed high-tech bio-economies to further decrease their environmental footprint domestically and internationally, and the importance of biotechnology innovation transfer after critical and comprehensive sustainability assessments.

Sustainability performance is an important criterion for investors and lenders when making financing decisions. This study aims to analyze whether sustainability governance influences sustainability performance and the extent to which sustainability performance affects a company’s cost of debt. This study analyzed 209 publicly listed companies in Indonesia, Malaysia, Singapore, and Thailand. Sustainability governance was measured using two proxies from the Refinitiv Eikon database: (1) the existence of a sustainability committee and (2) the existence of sustainability assurance. Sustainability performance and the cost of debt were assessed using scores obtained from the same database. Quantitative analysis was performed using descriptive statistics, ANOVA, and structural equation modeling (SEM) with path analysis. The results showed that sustainability governance has a strong positive impact on sustainability performance. However, the results also show that higher sustainability performance leads to a higher cost of debt. This finding suggests that companies that integrate sustainability into their core business strategies face challenges in obtaining funding to support sustainability initiatives. This research implies that a well-developed sustainable ecosystem needs to be established before companies can realize a lower cost of debt.

Under the background of economic globalisation, to promote the sustainable development of enterprises, sustainable innovation performance is explored for enterprises from the perspective of knowledge acquisition. Here, high-tech industry practitioners in Jiangsu Province are recruited for research of knowledge acquisition and continuous innovation using a QS (Questionnaire Survey). A total of 360 QSs are issued, and the QS items are developed based on a comprehensive collation of domestic and foreign literature and are mostly quoted from existing data. Consequently, a talent mining method is proposed for technological innovation based on the machine learning multi-layer perceptron model. The results show that there is a significant correlation between complementary knowledge and knowledge acquisition. Knowledge acquisition is significantly related to continuous innovation. Complementary knowledge is significantly related to continuous innovation. The high-tech industry has realised that knowledge will become the key to the success of the high-tech industry in the future.

In the context of booming digital economy, artificial intelligence (AI), as a future-oriented strategic technology, opens up new research perspectives for the exploration of sustainable development strategies. This study utilizes text analysis method to construct measurement index of AI, combines social and environmental performance and financial performance to comprehensively measure sustainable development performance (TDP), and explores impact of AI on TDP of enterprises from the theoretical and empirical levels. It is found that (1) the improvement of AI plays a positive and facilitating role in increasing enterprise TDP, and conclusion remains consistent after the robustness test. (2) Mechanism test finds that AI improves firms’ TDP mainly through two pathways: green innovation (Gin) and dynamic capabilities. (3) The heterogeneity test shows that AI positively affects firms’ TDP to a greater extent in the high-tech industry and in eastern region compared to central and western regions and non-high-tech industries. (4) The increase of market incentive-based environmental regulation shows a significant positive moderating effect on AI affecting firms’ TDP. We reveal impact and mechanism of AI on TDP, which provides new empirical evidence for China to carry out the AI era and enterprises to realize sustainable development.

The main goal of this article is to assess the impact of product innovation on the economic performance of firms operating in Medium and High-Tech (M&HT) industries. Using information from a large and unique dataset on Italian firms we estimate, by means of Propensity Score (PS) matching methods, a positive and significant ‘innovation premium’ both in terms of profitability and growth (in the short-run) for those firms who introduced new innovative products. We also find that this innovation premium is particularly large for small firms and even more so when considering new established firms.

The spread of digital technologies changes production processes and business models, which has important effects for diversification of the economy. The fourth industrial revolution and the Industrial Internet of Things open up new opportunities for the introduction of technologies, having a significant impact on the production cycle, starting with highly automated production lines and ending with the large-scale implementation of technological solutions designed to improve productivity, optimize costs, quality and reliability. Defining digital transformations, primarily in the manufacturing industry as a strategic imperative for the entire economy, for the first time, based on opinions and intentions of entrepreneurs (short and medium-term), key aspects of the digitalization process in Russian medium, high-tech and low-tech manufacturing industries are revealed. A set of tendencies in the development of digital technologies by their main types is presented, the level of industry participation in digital transformation is shown, as well as many other important digital transformation processes in enterprises that are not measured by quantitative statistics. For all the studied industries, factors hindering digital transformation are identified and ranked.

Sustainability practices and the cost of debt: Evidence from ASEAN countries

This paper examines the effect of sustainability performance disclosures on corporate cost of capital. We find that both cost of debt and cost of equity are lower for firms that disclose sustainability performance information, when compared to firms that do not disclosure similar information. We also explore the differential effect of sustainability performance disclosures on both cost of debt and equity and find that the effect is stronger for cost of equity. For corporations that disclose sustainability information, effects with respect to economic, governance, social, ethics and environmental sustainability performance are examined individually. Results show that sustainability disclosures pertaining to the economic, ethics and environment performance unambiguously lower both cost of debt and equity. Furthermore, disclosures regarding social and governance performance only lower cost of debt. Results have policy, practical and education implications by underscoring the value-relevance of currently voluntary sustainability reporting and assurance and a possible move toward improved standardized sustainability disclosures.

This study empirically examines how different types of innovation interact with product diversification strategies to affect firm performance. Utilizing panel data from 1,246 Korean firms gathered through the 2018 Korea Innovation Survey and linked with financial data from NICE Credit Information Service (2018-2023), the analysis applies the Arellano-Bond dynamic panel model to explore performance outcomes in terms of revenue growth and operating profit margin. The findings reveal that firms introducing new products for new markets—typically considered the most uncertain innovation strategy—benefit significantly when this approach is coupled with product diversification. In particular, these firms demonstrate higher revenue growth and improved profitability. In contrast, firms focusing on improving existing products for current markets showed no significant impact from their diversification efforts, suggesting a neutral relationship between their innovation type and diversification strategy. These results are notable because they challenge earlier findings that often reported limited or insignificant performance outcomes for firms targeting both new products and new markets. When diversification is incorporated strategically, however, such innovation approaches can generate tangible gains. This supports the relevance of Ansoff’s original proposition that diversification, though risky, can be a powerful driver of growth when appropriately aligned with innovation dynamics. The study offers important implications across firm sizes and industries. While large firms may possess greater resources to manage diversification risks, small and medium-sized enterprises (SMEs) can also benefit from aligning innovation strategies with market expansion. A more granular analysis by firm size and sector would further enrich understanding, especially in Korea’s high-tech industries where innovation and diversification increasingly serve as key levers of competitiveness. By providing empirical evidence on how innovation types and diversification strategies jointly affect firm outcomes, this research contributes to both innovation and strategic management literature. It emphasizes that innovation alone does not guarantee success—its effectiveness depends on how well it is integrated with broader corporate strategies such as product diversification. In conclusion, this study underscores the strategic value of tailoring diversification approaches to the nature of innovation pursued. For Korean firms navigating turbulent and competitive markets, leveraging innovation-driven diversification emerges as a viable pathway to sustainable growth and performance improvement.