Firm Sustainability Research Articles

How do corporate social responsibility and green innovation transform corporate green strategy into sustainable firm performance?

In the context of today's dynamic world with the development of technology, running a green-oriented business for long-term viability is no longer an option, particularly for businesses in general and small-medium enterprises (SMEs) for long-term viability and sustainability . The present research examines the relationship between corporate green strategy and sustainable firm performance for SMEs by exploring the mediating role of corporate social responsibility and green innovation in the given context in an emerging economy. This study applies a quantitative approach by using a well-structured questionnaire for data collection. The target respondents were managers at senior and middle levels. There were 469 valid responses obtained from the main survey. The final data was included in the analysis using Smart PLS (version 3.3.2) Structural Equation Modelling (SEM) to investigate the relationships between constructs and latent variables and provides an extension to the current literature by providing an integrated model of corporate green strategy, green corporate social responsibility, green innovation and sustainable firm performance. In addition, the model's application to the emerging economy reinforces the originality of this study. This study therefore provides an integration of “three green” elements in a model which is also unexplored by the extant literature. Specifically, green strategy, green corporate social responsibility and green innovation are integrated, aiming to facilitate enterprises, improve environmental performance, enhance sustainable competitive advantages and achieve firm sustainability. Moreover, this study provides strategic thinking for long-term business development towards a sustainable balance of economic, social and environmental benefits, through which business leaders are encouraged to consider practical actions carefully to improve environmental performance as this is certain to develop business competitiveness and achieve sustainable business performance. • Integrated model of corporate green strategy, green corporate social responsibility, green innovation and sustainable firm performance. • Strategic thinking for long-term business development towards sustainable balance of economic, social and environmental benefits. • Encouraging to practical actions carefully to develop business competitiveness and achieve sustainable business performance.

CEO Vision Communication of Sustainability and Sustainability Performance

Even if sustainable development is well known for its critical role in firm economic benefits, survival, and growth, we still know little about the antecedents of how it works within the organization. The purpose of this paper is to establish how and when CEO vision communication fosters firm sustainability performance. Building on the framework of upper echelon theory and organizational sustainability literature, we proposed that vision communication of sustainability would catalyze organizational change, facilitating firm sustainability performance. Moreover, we also reveal the boundary condition of dialectical leadership. CEO dialectical leadership will accelerate the above positive associations. Data analysis results from 130 CEO and their 562 top management team (TMT) members supported our propositions. Theoretical implications and future research directions are also discussed.

The Path Constitution of Platform Evolution: An Organizational Momentum View

Although the evolutionary pathways are critical to the success of platforms, extant literature has provided little insight into the dynamic processes of the platform evolution, let alone how platforms constitute the evolutionary pathways over time. Against this backdrop, this study examines the evolutionary path constitution of platforms by adopting an organizational momentum lens. Through an exploratory case study of Pinduoduo, it provides evidence of path dependence under the network effects and of path creation resulting from the deliberate actions conducted by the platform firms. Moreover, this study identifies three platform strategies to manage its momentum to facilitate platform evolution and sustainability. Furthermore, this study develops a holistic framework to explain the interactions between platform momentum and path constitution by considering the outcomes of these strategies. The findings and developed framework shed novel light on the path constitution of platform evolution and provide new insight into the sustainability of the platform firms and platform-based markets by leveraging momentum thinking.

The Impact of Lean Management Practices on Economic Sustainability in Services Sector

Lean management is a significant weapon that can help firms within the fourth industrial revolution to find unique solutions to their own unique problems. On the other hand, there is a noticeable increase in the level of awareness of firms all over the world regarding their urgent need to achieve economic sustainability. This paper aims to build a model that best measures the impact of lean management practices on economic sustainability for service firms. For this purpose, a multiple case study is employed, exploratory and confirmatory factor analyses are utilized to develop valid and reliable measure of lean management, and Pearson’s correlation and regression analyses are employed to measure the impact of lean management on economic sustainability. The results provide evidence of the positive impact of lean management on economic sustainability. This paper contributes to the literature by developing a novel measure of lean management and by providing evidence of the positive impact of lean management on economic sustainability, as this relation is not well tested empirically, especially in emerging economies.

The Credit Risk of Sustainable Firms during the Pandemic

This study investigates how the credit risk of more sustainability-oriented firms changes when national governments intervene in their economies to counterbalance the COVID-19 pandemic. For this reason, we examine how the credit default swap spread changes on a database of all listed firms—for which a credit default swaps (CDS) contract is available—in Europe and the United Kingdom during the whole year of 2020. We find that when national governments intervene in the local economies, the CDS spreads for these firms decrease more than for other firms. Furthermore, the CDS spread changes are more sensitive to those policies aimed at supporting household and business income during the pandemic rather than those policies related to stay-at-home measures and investments in healthcare. Our results corroborate previous theories linking firm sustainability, equity and credit risk.

The Effects of Innovation Adoption and Social Factors between Sustainable Supply Chain Management Practices and Sustainable Firm Performance: A Moderated Mediation Model

The aim of this study was to develop higher-order scales for assessing sustainable supply chain management practices, innovation adoption, and sustainable firm performance in the restaurant sector. Three different higher-order scales were developed for assessing the SSCM, SFP and innovation adoption. The first scale for SSCM higher-order construct consisted of service–product supply chain management practices (SPSSCM), service–setting supply chain management practices (SSSSCM), and service–delivery supply chain management practices (SDSSCM). The second higher-order scale for sustainable firm performance (SFP) consisted of economic, operational, environmental, and socio-cultural performance. The third higher-order scale for innovation adoption (INNO) consisted of “product- and process-based innovation”, “marketing-based innovation”, “technology-based innovation” and “organizational innovation”. The face, content, construct, convergent, and discriminant validity was tested using pilot study, expert opinion, EFA, and CFA. With 178 responses collected from restaurateurs, managers, and supervisors of casual restaurants in Prachuap Khiri Khan province in Thailand, this study evaluates the direct effects of SSCM on SFP. It further evaluates the mediating role of innovation adoption between sustainable supply chain management practices and firm performance and the moderated mediation effects of socio-demographic factors such as age, gender, education, and experience. The results reveal that sustainable supply chain management practices can positively lead to sustainable firm performance. However, irrespective of the indirect effects of socio-demographic factors, adopting innovation completely mediates the relationship between sustainable supply chain management practices and firm performance.

Tax Avoidance Culture and Employees' Behavior Affect Sustainable Business Performance: The Moderating Role of Corporate Social Responsibility

Employees' behavior and corporate social responsibility (CSR) can affect firms’ profitability and increase the corporate economic burden. This current research endeavors to explore how business firms navigate employees' technology-driven behavior and CSR sustainable practices for tax avoidance to affect firms’ performance. This study examines how CSR sustainable practices moderate the relationship between employees' behavior and tax avoidance to achieve sustainable business performance. The study incorporated the Maximum Likelihood Estimator (MLE) for the purpose of data analysis using the structural equation modeling (SEM) technique that is suitable for this sample size. The study’s target population is employees of small and medium enterprises located in Pakistan. The study has drawn a sample of employees and applied a convenience sampling technique. The findings show that tax avoidance, employee behavior, and corporate social responsibility positively affect business firms’ performance. The results further indicate that sustainable CSR practices significantly moderate tax avoidance’s effect on business firms’ performance. However, there is no condition to identify the relationship between employee behavior and firm performance. In theory, this research contributes to the corporate strategy literature by answering how corporate social responsibility sustainable practices mediate the relationship between tax avoidance, employees' behavior, and sustainable business performance. It shows that socially responsible organizations will engage less in tax avoidance behaviors. The results exhibit that the study provides a systematic, holistic framework to attain sustainable firms’ performance. The findings' generalizability offers future direction with helpful insights for business managers and policymakers.

Motivations and Trade-Offs for Sustainability in Family Forestry and Tourism Firms: A Cross-National Survey

Family firms are the foundation of economies across the world. Yet, little is understood about what motivates sustainability in these firms, particularly in developing economies. In this study, we examine family forestry and tourism firms in Chile and India and use a novel stated-choice method to understand preferences for sustainability and the trade-offs with profit maximization, law and regulation, and family relations (among others). There were heterogeneous preferences across the sample, with respondents favoring financial outcomes and viewing regulation negatively. Respondents preferred positive environmental impacts, and this was significantly favored by tourism firms. Forestry firms were particularly focused on maintaining satisfactory family relationships, where there was stronger family involvement in the firm’s management decisions. Indian respondents were more likely to prefer the expansion option in the choice study (financial outcomes), while Chileans preferred the eco-labeling choice (sustainability), suggesting more supportive sustainability norms in Chile. Chileans were more likely to exceed legal compliance in their choice selection and favored positive environmental impacts more. Overall, tourism firms were larger in terms of revenues and favored the eco-labeling choice with positive environmental impacts but with minimal regulations, while forestry favored expansion. These differences may be driven by the resources available to tourism firms for supporting sustainability measures and the importance of sustainability to their business models. Policies to support sustainability among family firms must account for their heterogeneity and must provide supports and incentives rather than regulations to facilitate sustainability.

Tax Aggressiveness and Sustainability of Listed Oil and Gas Firms in Nigeria: Does Firm Size Matter?

This study empirically investigated the relationship which exists between tax aggressiveness moderated by firm size and sustainability of oil and gas firms in Nigeria. In order to determine the relationship between tax aggressiveness and corporate sustainability, tax aggressiveness was measured using effective tax rate while corporate sustainability on the other hand was proxy using social-environmental performance. The formulated hypotheses to guide the investigation and the statistical test of parameter estimates was conducted using OLS regression model operated with STATA V.15. Ex Post Facto design was adopted and data for the study were obtained from the published annual reports and accounts of listed oil & gas firms on Nigerian Exchange Group (NGX) spanning from 2013-2021. The findings of the study generally indicate that tax aggressiveness has significant and positive relationship with sustainability of quoted firms in Nigeria at 1% significant level. In the same vein, it was noted that firm size moderates the relationship between tax aggressiveness and corporate sustainability at 5% level of significance. Thus, the study concludes that tax aggressiveness ensures sustainability of firms in Nigeria. The study however suggests the need for corporate organizations to engage the services of tax consultants to assist them to organize the firm’s financial dealings in such a way t hat t he firm suffers a minimum tax liability.

INNOVATION: A MODERATING FACTOR FOR THE EFFECTIVENESS OF DIVERSIFICATION STRATEGIES ON THE SUSTAINABILITY OF HOSPITALITY FIRMS IN NIGERIA

The study aims to examine the effect of innovation as a moderating factor for the effectiveness of diversification strategies on the sustainability of hospitality firms in Nigeria. The study applied a quantitative method involving a survey design. A questionnaire measurement instrument was constructed and deployed on a sample of 104 respondents from 3 four-star hotels in the study area. Confirmatory Factor Analysis (CFA) was used to validate the constructs in the measurement instrument. Multiple regression analysis was used to test the study hypotheses. The results showed that concentric and conglomerate diversification strategies have a significant positive effect on the sustainability of hospitality firms. Also, innovation has a significant positive moderating effect on the relationship between diversification strategies and the sustainability of hospitality firms. Therefore, the study concluded that hospitality firms, particularly hotels should consistently innovate and diversify their services and product to gain market share, customer patronage and improve organizational performance in the long run while also remaining sustainable.

Role of Financial Institutions on Growth of Small and Medium Enterprises in Japan

Small-scale enterprises highly influence the growth of a country. Small-scale enterprises are fundamental in creating employment opportunities for many people, notably in rural areas. Consequently, the study was determined to examine the role of financial institutions in the growth of small and medium enterprises in Japan. The study did a literature review to explore the findings from the preceding studies. The study findings from the majority of the studies showed that financial institutions play a critical role in the growth of small and medium enterprises. The financial institutions provide services and loans that spur the growth of small and medium enterprises. In addition, the financial institutions are involved in providing the startup capital and this increases the sustainability of the small firms. In some instances, the financial institutions provide capacity building to the small enterprises, increasing their skills and knowledge in the management process. The small-scale enterprises encounter many difficulties and the financial instructions become a channel for accessing funds. The factors that limit small and medium enterprises from accessing the loans from the financial institutions is mainly lack of collateral. The study concluded that financial institutions determined the growth of small and medium enterprises in Japan to a large extent. The study recommended that drastic and effective financial policies which directly increase accessibility to available credits from financial institutions ought to be set in Japan. The government needs to sale up a framework that will make the financial institutions increase their lending to the small and medium enterprises. A specialized borrowing system needs to be developed in the financial institutions to carry out small-scale lending functions. Keywords: Financial institutions, growth, small scale enterprises, Japan

Competition and sustainability of Ecuadorian microfinance institutions (MFIs)

Competition is often praised for enhancing efficiency in the process of resource-allocation. However, it could also put at risk the sustainability of firms operating within certain industries such as the financial sector. This could have further managerial implications when it comes to social enterprises such as microfinance institutions (MFIs). Using data from Superintendencia de Economía Popular y Solidaria over the period 2016-2019, this study aims at analyzing the aspects of competition on sustainability of Ecuadorian MFIs. More specifically, the research focuses on savings and credit cooperatives (SACCOs). Relying on both the structural and non-structural approach to measure competition at a firm level, findings are in line with an important portion of the microfinance literature claiming that competition is negatively associated with the main measures of financial sustainability and portfolio quality.

Impacts of big data analytics adoption on firm sustainability performance

PurposeThis study aims to examine the impacts of adopting big data analytics (BDA) on firm sustainability performance (FSP) mediated through firm financial performance (FIP) and operational performance (OPP).Design/methodology/approachA theoretical model is based on ideas from existing literature on BDA, sustainability, FIP, dynamic capability view theory and resource capability view theory. The model is then validated using the partial least squares–structural equation modeling technique with consideration of 312 responses from 24 Indian firms.FindingsThe study provides three important findings. First, there is a significant and positive impact of BDA on firms’ financial and OPP. Second, BDA significantly and positively impacts firm business process performance (BPP) and dynamic capabilities (DYC), which, in turn, significantly impacts the firm’s financial and OPP. Finally, both the financial and OPP of the firm significantly and positively impact sustainability performance.Research limitations/implicationsThis theoretical model is unique in showing the impacts of BDA on BPP, firm DYC, financial and OPP. The study also shows how BDA can enhance FSP by mediating through financial as well as the OPP of the firms. The study uses data only from India and thus the proposed model cannot be generalizable.Originality/valueThis study provides valuable input to researchers, academicians and industry practitioners on the importance of BDA for FSP. The study also adds value to the body of knowledge on sustainability, FIP and technology adoption. The proposed unique theoretical model has an explanative power of 70%, which is quite high and can be used across different industries.

The effects of CSR disclosure on asymmetric information and RoI of publicly listed companies in SRI-Kehati index in Indonesia

PurposeThis study aims to investigate the influence of corporate social responsibility (CSR) disclosure on asymmetric information and return on investment (RoI) in Indonesia. The research specifically assesses the effects of CSR disclosure along with other independent variables such as total assets, return on equity, capital expenditures, net profit margin and sales growth on asymmetric information and RoI.Design/methodology/approachThe study applied a panel econometric regression model to examine and test the effects of CSR disclosure and financial indicators on asymmetric information and RoI. A total of 275 samples were garnered from private and state-owned publicly listed companies selected in the SRI-Kehati index as sustainable firms in Indonesia from 2009 to 2019. Those listed companies in the SRI-Kehati index have market recognition and are able to maintain sustainability practices in their business doings. Asymmetric information was calculated by measuring the spread of market share prices. CSR disclosure was measured with global reporting initiative standards. Other variables did not require calculation.FindingsThis study discerns the significant influence of CSR disclosure on asymmetric information and RoI on the listed firms of the SRI-Kehati Index in Indonesia. To articulate, the more transparent CSR disclosure is, the asymmetric information should be lower. Besides that, more comprehensive CSR disclosure is associated with a better corporate return of investment. In scrutinizing the control variables, this research validates the significant influence of corporate assets and sales revenue on both dependent variables.Research limitations/implicationsThis research has some limitations that require further research. First, the research was conducted in Indonesia. However, other Southeast Asian markets may have their own uniqueness. Therefore, further research is needed in other specific Southeast Asian countries. Second, the sampling bounds on the corporation which gained sustainable recognition in SRI-Kehati Index. Future studies can extend more observation by comparing SRI-Kehati index to firms, which are not listed in the index.Practical implicationsThis study recommends better capital market monitoring and evaluation to improve the quality of the firms’ reports in both business and social aspects. By investing more in philanthropic and social activities, firms can signal the market credibility to their various external stakeholders on their market adjustment to changing external business environment.Social implicationsAs for society, robust CSR disclosures will facilitate investors’ understanding of the conditions before making an investment in public listed companies. At the same time, companies issuing the disclosures are expected by society to perform responsibly, as illuminated in the report. As a result, the CSR disclosures will create a virtuous cycle of sustainability between the company and the society.Originality/valueFirst, this research reinforces the global corporate governance concern to urge more corporate disclosures on firm performance in an Indonesian context. Second, this study fills the research gap on the association of CSR disclosure to asymmetric information in Indonesian literature. Third, the findings underpin the integration of social responsibility on the firms’ core business decision-makings to warrant business credibility to all firms’ stakeholders in Indonesia.

COVID-19, ESG investing, and the resilience of more sustainable stocks: Evidence from European firms.

Following the COVID‐19 outbreak, orientation toward sustainability is a critical factor in ensuring firm survival and growth. Using a large sample of 1,204 firms in Europe during the year 2020, this study investigates how more sustainable firms fare during the pandemic compared with other firms in terms of risk–return trade‐off and stock market liquidity. We also highlight the drivers of the resilience of more sustainable firms to the pandemic. Particularly, we document that higher levels of cash holdings and liquid assets in the pre‐COVID period help these firms to perform and absorb the COVID‐19 externalities better than other firms. Our results are robust to a host of econometric models, including GMM estimations and several measures of stock market performance. These findings contribute to the theoretical and empirical debate on the role of the sustainability as a source of corporate resilience to unexpected shocks.

Investigating the impacts of microlevel CSR activities on firm sustainability: mediating role of CSR performance and moderating role of top management support

PurposeThe purpose of this study is to investigate the impacts of microlevel corporate social responsibility (CSR) activities on firm sustainability. The study also examines the mediating roles of CSR performance (CSRP) and top management support on firm sustainability.Design/methodology/approachWith the help of existing literature and theories, a theoretical model has been developed, which is then validated using structural equation modeling technique considering 327 respondents who perform CSR activities at respondents' firms in India. The research methods include moderator analysis to understand the role of top management support for firm sustainability.FindingsThis research found that microlevel CSR activities have a significant positive impact on CSR performance. The study also found that there is a significant moderating impact of top management support on the relationship between CSR performance and firm sustainability.Research limitations/implicationsThis study proposed a theoretical model which has established the relationships between the microlevel CSR activities and CSRP along with firm sustainability. This is an effective model and provides vital inputs to the firms on how to succeed with CSR activities. Limitations to this study's generalizability include use of cross-sectional data and that the data were collected from one country.Originality/valueThe proposed theoretical model is unique and can be applied by firms to enhance firms' CSR performance. There is no other study which has investigated the moderating role of firm leadership team impacting the relationship between CSR performance and firm sustainability. Thus, this study is a unique attempt and adds value to the extant literature on CSR as well as firm sustainability.

Corporate Philanthropy and Firm Performance: a Moderatig Role of Entrepreneurship & Innovations. A Case of Dangote Group of Company

Corporate philanthropy (CP) and charitable giving is now a major strategic event for multinational firms to strategically position themselves for higher performance returns of investment. Therefore, the significant impact of firm performance in relation to profitability can be empirically linked with CP. This study aim to explores the broad category of CP programs in Dangote Nigeria with the aid of ADF. The study examines the social contribution and intervention of infrastructural development, covid 19 pandemic and entrepreneurial training programs and building innovative ideas. Case study approach and the use of qualitative methods were employed in the analysis. The findings of this study revealed that CP activities and social interventions significantly impacted on performance. The results of this study have significant and practical implications on future societal progress, long term performance, infrastructural development, entrepreneurship growth, capacity building and firm sustainability.

Green Trade Credit and Sustainable Firm Performances During COVID-19: A Conceptual Review

The modernization of the economic world creates environmental issues around the globe, to improve global problems such as global warming, inequality, climate change, hunger and poverty; it is necessary to improve sustainable performance. Mostly, the product manufacturers have a greater influence on the supply chain and the environment. Before COVID-19, the economy of Pakistan was belligerent but not collapsed; however, COVID-19 created a situation where most of the companies will go bankrupt. Pakistan is considered less developed financially, where extensive growth is predictable in the use of green trade credit demand by firms listed at the Pakistan Stock Exchange. Thus, the study analyzes the conceptual linkages between trade credit demand and sustainable firm performances through green credit by adopting the theory of RBV and also assesses the role and impact of COVID-19; further, suggest some policies to cope with COVID-19 challenges. Secondary literature is being reviewed after searching electronic databases like Scopus, Directory of Open Access Journals, Web of Science, ProQuest, ScienceDirect, Google Scholar and JSTOR. This study will help policymakers whenever they need to consider green trade credit decisions. Thus, buyers need to be proactive while adopting green trade credit to compete in this sustainable competitive marketplace.

Green creativity, TQM and business sustainability of large manufacturing firms in Malaysia

PurposeThis paper examines the effect of green creativity (GC) on the business sustainability (BS) of large manufacturing firms (LMFs) in Malaysia and investigates the mediating effect of total quality management (TQM) on this relationship.Design/Methodology/ApproachA quantitative approach was adopted, using a sample of 206 LMFs; the formulated hypotheses were analysed using partial least squares structural equation modeling.FindingsThe findings revealed a significant positive effect of GC on the TQM and BS of LMFs and a significant positive effect of TQM on their BS. TQM also has a full mediating effect on the relationship between GC and BS.Research Limitations/ImplicationsOne of the limitations of this study is its focus on Malaysian LMFs. It nevertheless contributes to the literature by extending knowledge concerning their TQM, GC and multi-faceted perspectives. This is largely ignored in literature and, as such, the study paves the way for additional research.Practical ImplicationsThe findings of this study may be used as guidelines for CEOs, particularly on the way TQM and GC can be developed for enhanced BS, in the context of South Asian countries.Originality/ValueThis study is the first to test the influence of GC on Malaysian LMFs’ BS and the first worldwide to investigate the mediating effect of TQM on their GC-BS relationship.

Renewable energy policy, green investment, and sustainability of energy firms

Based on the demand for green development and sustainable economic growth, the most effect approach for improving the sustainability of energy firms through energy policy and green investment is an important concern for those from all walks of life. This study examines the relationship between renewable energy policies and firm sustainability in China. Using 32,267 datapoints from 2007 to 2019 for A-share listed companies in Shanghai and Shenzhen, China, our results suggest that renewable energy policies are not conducive to enhancing firm sustainability and sustainability rate; this result is inconsistent with our theoretical expectations. We further find that firm green investment promotes firm sustainability and plays a partial mediating effect in the impact of renewable energy policies on firm sustainability. In addition, the differences in firm characteristics and market environment make the impact of renewable energy policy on firm sustainability heterogeneous. Renewable energy policies mainly inhibit the sustainable development of state-owned firms, labor-intensive firms, and firms with low equity concentration.