Early mover advantage in Roundtable on Sustainable Palm Oil certification: A panel evidence of plantation companies

Tey, Yeong Sheng; Brindal, Mark; Darham, Suryani; Sidique, Shaufique Fahmi; Djama, Marcel

doi:10.1016/j.jclepro.2019.119775

Cited by 29 publications

(22 citation statements)

References 19 publications

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“…Other studies have found that sustainable certification for exports has no impact on palm oil companies' operational performance in Malaysia [15]. The timing in adopting RSPO certification influences the profitability of the palm oil companies [26]. This study combines some literature related to other factors that affect the performance of palm oil companies.…”

Section: Methodsmentioning

confidence: 91%

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The Impact of Sustainable Certification on Financial and Market Performance: Evidence from Indonesian Palm Oil Companies

Suroso¹,

Tandra²,

Wahyudi³

2021

IJSDP

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The palm oil industry is a strategic sector that plays an important role for national economics. Although the palm oil industry's role and contribution are high, land clearing and operation are often associated with environmental and social issues. The sustainable certification was then developed to ensure that palm oil companies can continue to operate without involving environmental and social deprivation. The previous research related to the impact of a sustainable certification found several positive and negative impacts on palm oil companies' performance in general. Therefore, this study aimed to determine the impact of sustainable certification on Indonesia's palm oil companies' financial and market performance. This research focused on 14 palm oil companies in Indonesia that went public with an observation year between 2014 and 2019. Analysis through panel regression found that sustainable certification has no impact on Indonesia's palm oil companies' financial and market performance. The study could be a recommendation and justification for palm oil companies for consider to take a sustainable certification.

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Section: Methodsmentioning

confidence: 91%

“…Thus, the level of CPO extraction from palm oil companies greatly affects the firm's performance. Previous research reported that CPO extraction affects firm performance [26]. • Firm size.…”

Section: Methodsmentioning

confidence: 99%

The Impact of Sustainable Certification on Financial and Market Performance: Evidence from Indonesian Palm Oil Companies

Suroso¹,

Tandra²,

Wahyudi³

2021

IJSDP

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“…Given that pecking order in the effects of integration on revenues, efficiency becomes a priority. This point is reinforced by Tey et al (2020). Efficiency establishes a solid foundation before it is worthwhile for firms to take on additional investment (risk).…”

Section: Discussionmentioning

confidence: 99%

“…Past studies used this model to identify the impact of various strategic resources on financial returns. Recently, Tey et al (2020) applied RBV analysis to examine the financial outcome and, ultimately, the early-mover advantage of plantation firms' decisionmaking with respect to order of certification. Closer to the subject of this study, Chang et al (2016) employed the RBV model to synthesize the advantageous financial effect of supply chain integration, involving close coordination between suppliers and customers.…”

Section: Introductionmentioning

confidence: 99%

Vertical and Horizontal Integration in the Profitability of Malaysian Broiler Firms

Tey

Arsil

2021

Trop. Anim. Sci. J.

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Vertical integration has been widely promoted for offering production, transaction, and market benefits in the poultry industry. These benefits must be translated into profitability-a proxy of competitive advantage. This study aimed to identify the financial effect underlying the degree of backward, forward, and horizontal integration, alongside the financial strength and management capability of broiler firms. We used random-effects general least squares to analyze a panel dataset of broiler firms that publicly listed in Kuala Lumpur Stock Exchange Malaysia for the 2006-2018 period. Support is found for the hypothesis that forward integration enhanced profitability. In comparison, the operating margin had a greater influence on broiler firms' financial performance. Notwithstanding value chain development, the relative findings suggest that efficiency remains a priority in a commodity-based broiler market. It is thus recommended that management capability be emphasized.

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“…Preference for certified sustainable palm oil (CSPO) may lead firms to improve their management (Pye, 2019). Firms adopting the RSPO standard also possessed an early mover advantage in growing CSPO markets (Tey, Brindal, Darham, Djama, & Sidique, 2020a). Guided by a sustainability framework for operational decisions, firms certified under the RSPO standard generally attained higher returns on invested capital (Tey et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Sustainability stewardship: Does roundtable on sustainable palm oil certification create shareholder value?

Tey

Brindal

2020

Corp Soc Responsibility Env

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The adoption of sustainability standards is often viewed as a profitability conundrum by palm oil firms and their shareholders. This study examines whether, considering the inherent risk, the Roundtable on Sustainable Palm Oil (RSPO) sustainability initiative creates shareholder value. Based on the panel information of plantation firms listed on the Indonesia and Kuala Lumpur Stock Exchanges, RSPO‐certified firms earned mixed risk‐adjusted performance results relative to non‐RSPO and total palm oil portfolios. They also demonstrated a limited probability for upside growth. Additionally, it is possible that institutionalized sustainability standards do not address all the environmental, social and governance pillars that should constitute sustainable investing. Consequently, business operators and investors seeking improved performance should focus on the fundamentals whilst incorporating sustainability standards.

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Early mover advantage in Roundtable on Sustainable Palm Oil certification: A panel evidence of plantation companies

Cited by 29 publications

References 19 publications

The Impact of Sustainable Certification on Financial and Market Performance: Evidence from Indonesian Palm Oil Companies

The Impact of Sustainable Certification on Financial and Market Performance: Evidence from Indonesian Palm Oil Companies

Vertical and Horizontal Integration in the Profitability of Malaysian Broiler Firms

Sustainability stewardship: Does roundtable on sustainable palm oil certification create shareholder value?

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