The synergistic effect of environmental sustainability and corporate reputation on market value added (MVA) in manufacturing firms

Abstract

This study is an attempt to explore the predictive effect, in terms of operational capability, of a large manufacturing firm’s environmental greening efforts carried out in the interest of sustainability, and of the firm’s reputation for social responsibility. Through both a traditional and a new, innovative approach, this study investigates the potential synergistic effect of environmental sustainability and the improvement of corporate reputation on a firm’s market performance in terms of shareholders’ equity value (market value added, or MVA) when taken together with the firm’s other key differential business factors. The findings of this study provide notable implications that establish the integrative paradigm for the influence of environmental greening sustainability on firm performance through the use of an innovative methodological approach regardless of a priori theoretical assumptions. Through this, the impact of environmental sustainability and corporate reputation, as well as their synergistic effect, on firm performance push forward a new foundation in business practice. The major findings and new methodological approach (Back-Propagation Neural Networks; BPNN) in this study will open a broad new spectrum of opportunities for further research on these topical issues.