Impact of Smartness on Sustainability: An Empirical Study of North American Agri-food Companies

Abstract

There are many examples of implementation of Industry 4.0 Tools leading to improved sustainability, operational performance and financial performance, but the evidence is mostly anecdotal. The aim of the study is to examine how implementation of Industry 4.0 tools affect sustainable operations in agri-food supply chains and to make a general statement based on empirical analysis. Using farmer/grower, manufacturer/processors, wholesalers/distributors, and retailer companies listed in the North American market as the study population, Seemingly Unrelated Regression (SUR) equations are estimated to identify the impact of Industry 4.0 adoption level on sustainability performance, operational efficiency and financial profitability and control for the common financial shocks that can affect sustainability performance scores and financial outcomes simultaneously. Estimation results indicate that, the Industry 4.0 adoption level has positive impact on sustainability performance and efficiency, however there is no association between smartness and significant average abnormal return.