Nexus between institutional quality and corporate sustainable performance: European evidence

Rahi, Abm Fazle; Chowdhury, Mohammad Ashraful Ferdous; Johansson, Jeaneth; Blomkvist, Marita

doi:10.1016/j.jclepro.2022.135188

Cited by 19 publications

(31 citation statements)

References 107 publications

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“…We place a greater emphasis on dynamic GMM's results than on linear mixed-effect multilevel regression's results. The result is consistent with the previous literature (Azam et al, 2021;Baumöhl et al, 2019;Rahi et al, 2022b). Under GMM, we did not find any association for PS, which might be attributed to political instability, particularly in CEE countries (Blagojevi c and Damijan, 2013;Brammer et al, 2006;Gherghina et al, 2019).…”

Section: Financial Performancesupporting

confidence: 92%

“…Highly secure environments with high ROL Financial performance allow businesses to invest and expand in any country, increasing financial and sustainability performance. For example, the protection of property rights and trust in the police and justice system assist corporations in assuring return on asset (ROA) and return on investment (ROI), driving companies to invest in social and environmental sustainability (Rahi et al, 2022b). Less open competition and poor governance are two factors that contribute to a weaker business contribution by companies in countries with poor ROL and governance (Klomp and de Haan, 2015).…”

Section: 22mentioning

confidence: 99%

“…It is also believed that a strong financial position allows for greater focus on stakeholders' responsibilities, which eventually results in an improvement in long-term sustainable performance (Rahi et al, 2022b). The World Bank's three major governance indicators, the WGI, were obtained from the World Bank repository and used as a proxy for IQ considering previous literature (Hayat, 2019;Kaufmann and Lafarre, 2021).…”

Section: Sample Selection and Data Extractionmentioning

confidence: 99%

“…In this, government and public institutions are expected to provide the structure that IJAIM 32,1 simultaneously guarantees efficient use of resources and stable consequences of corporate sustainable policies. The macroeconomic condition of a country in earlier studies found to determine the intensity of governmental engagement toward sustainability (Tolliver et al, 2020;Rahi et al, 2022b;Rahi et al, 2023). In countries where the macroeconomic conditions are weak, governmental institutions are less engaged in sustainability policies than in countries with strong conditions (Rahi et al, 2022b).…”

Section: Introductionmentioning

confidence: 99%

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Reinventing the wheel? Factors influencing relationship: links between sustainability and financial performance. European evidence

Rahi,

Johansson,

Lions

2023

IJAIM

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Purpose This study aims to examine the factors that influence the relationship between sustainability and financial performance (FP) of the European listed companies. Design/methodology/approach This study analyzed data from 795 companies in 21 European countries by applying linear mixed-effects multilevel regressions, a two steps system generalized method of moments and quantile regression models to uncover the links between sustainability and FP. Findings The past four decades have witnessed abundant research to determine the relationship between corporate sustainability and FP. Thus, conducting further research in 2023 could be seen as “reinventing the wheel.” Yet, earlier research considered firms as isolated entities with sustainability and FP being dependent only on that firm’s actions. By contrast, with the help of network governance theory, this study shows that a firm’s sustainability and FP depend on an interplay among interorganizational actors, such as institutional qualities, macroeconomic factors and an embrace of sustainability. Here, large firms play an essential role. Three significant findings are drawn. First, sustainability performance has a significant impact on FP in the European context. Second, the institutional quality (IQ) of the rule of law and control of corruption plays a crucial role in enhancing sustainability and FP, and finally the interaction of IQ and economic growth helps to increase companies’ market value (Tobin’s Q). The consistent and empirically robust findings offer key lessons to policymakers and practitioners on the interplay among multiple actors in corporate sustainability and FP. Practical implications A synergetic multifaced relationship between governmental institutions and corporations is inevitable for ensuring sustainable development. The degree of intimacy in the relationship, of course, will be determined by the macroeconomic environment. Originality/value In this research, this study theoretically and empirically identified that corporate sustainability and FP are not solely dependent on corporate operation. Rather, it is transformed, modified and shaped through an interaction of multiple actors’ trajectories in the macro business environment.

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Section: Financial Performancesupporting

confidence: 92%

Section: 22mentioning

confidence: 99%

Section: Sample Selection and Data Extractionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Reinventing the wheel? Factors influencing relationship: links between sustainability and financial performance. European evidence

Rahi,

Johansson,

Lions

2023

IJAIM

Self Cite

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“…Sustainable management focuses on achieving profit and measured economic growth through increasing market share and sales growth (Sharma et al ., 2022; Chaudhuri et al. , 2022) as well as the reflection of these activities on environmental aspects related to using green products, materials and activities that preserve the environment (Rahi et al ., 2023) and paying attention to the social aspect by focusing on stakeholders, implementing social responsibility in these firms, and paying attention to the importance of supporting training and educational activities and employment opportunities (Yu et al ., 2023).…”

Section: Introductionmentioning

confidence: 99%

The impact of industrial Internet of things on sustainable performance: the indirect effect of supply chain visibility

Al-Khatib

2023

BPMJ

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PurposeSustainable management has become a strategic and popular requirement for stakeholders, as the ability to create competitive advantages in the current dynamic business environment and the pressures of digital transformation need to be increased attention in achieving the highest level of sustainable performance. The main objective of this paper is to explore the direct effects of the industrial Internet of things and supply chain visibility on sustainable performance (economic performance, environmental performance and social performance), in addition to evaluating the indirect effects that supply chain visibility plays in these relationships.Design/methodology/approachTo achieve the purposes and objectives of this work, a conceptual model was developed by referring to the current works in the literature, and the theoretical model was developed, and then data were collected through the questionnaire and by the snowball sampling method, as 380 questionnaires were used. In the data analysis, the multivariate analysis technique was used via Covariance-based Structural Equation Modeling (CB-SEM), as hypothesized relationships were evaluated through confirmatory factor analysis (CFA), and then the hypotheses were tested through a structural model.FindingsThe results reached the acceptance of all hypotheses, and this means that all hypothesized relationships were positive, as the impact of the industrial Internet of things was positive on each of the supply chain visibility and economic performance, environmental performance and social performance, and also the supply chain visibility mediated the relationship between each of the industrial Internet of things and economic performance, environmental performance and social performance.Originality/valueThe current paper reported a range of theoretical and practical contributions, as this study is the first to examine these hypothesized relationships together in this way and thus helped this study to develop new perceptions about Industry 4.0 technologies and their potential impacts on supply chain and sustainable performance. Also, this study had a variety of management recommendations that allow managers of pharmaceutical manufacturing companies operating in Jordan to develop their technological capabilities and use them to enhance sustainable performance.

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Corporate sustainability and financial performance: A hybrid literature review

Rahi,

Johansson,

Blomkvist

et al. 2023

Corp Soc Responsibility Env

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The discussion of “whether it pays to be green” is ongoing. This review does not intend to solve the debate, rather it soothes it by contributing to the concept of “when it pays to be green.” By focusing on the shortcomings of existing literature reviews on the topic of corporate sustainability and financial performance (CSFP) in this hybrid review, issues were identified that had been overlooked earlier. In general, CSFP holds a positive relationship but in a time lag. Nonconclusive results about the relationship within CSFP are due to self‐selection bias, endogeneity issues, and the use of multiple datasets and industry categories. Surprisingly, we also discovered that the impact of sustainability on financial performance is elusive in capitalist countries considered to be economically rational. Institutional and legitimacy requirements are a good starting point for shaping corporate behaviors in the short term; however, they might not be equally appropriate in the long term in cases when corporations shift operations to pollution havens. A multifaceted, synergistic interaction between governmental institutions, corporations, and other stakeholders is required—without imposing authority—to ensure durable sustainable development.

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Nexus between institutional quality and corporate sustainable performance: European evidence

Cited by 19 publications

References 107 publications

Reinventing the wheel? Factors influencing relationship: links between sustainability and financial performance. European evidence

Reinventing the wheel? Factors influencing relationship: links between sustainability and financial performance. European evidence

The impact of industrial Internet of things on sustainable performance: the indirect effect of supply chain visibility

Corporate sustainability and financial performance: A hybrid literature review

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