Strategic orientation, risk‐taking, corporate life cycle and environmental, social and governance (ESG) practices: Evidence from ASEAN countries

Abstract

Environmental, social, and governance (ESG) considerations have become increasingly important in the business world. Companies are expected to operate responsibly and sustainably, and stakeholders are demanding greater transparency and accountability. Our research aims to examine the influence of determinants on ESG practices in ASEAN countries (Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam), as measured by ESG performance on the Refinitiv Eikon. Although there have been many studies discussing ESG, only a few have discussed this relationship by involving strategic orientation, risk taking and corporate life cycle simultaneously. We use panel regression based on a sample of 2373 observations from 2004 to 2022. The results show that the prospector strategy orientation encourages a greater increase in ESG practices compared to the defender strategy orientation, which means that companies with a prospector orientation are more willing to practice ESG because they have strategic resources. The increasing risk‐taking by companies will reduce ESG practices. The more mature the company's life cycle stage will improve ESG practices. This brings implications that the strategy orientation chosen by the company, risk‐taking, and corporate life cycle are the determining factors for companies implementing ESG practices in ASEAN countries. This research contributes to the literature related to corporate sustainability by considering ESG as one of the measurements of sustainability which is currently the main investment trend being observed in financial markets, especially ASEAN countries which are the best areas to invest.

Economic asymmetries and the new “markets of tomorrow”

“…This article's contribution to the literature is developing a business strategy and concept that rethinks their specificities in the new markets of tomorrow. The article also confirms ongoing analyses (Bagul et al, 2023;Patil & Vhavale, 2023;Setiarini et al, 2023;Sharma & Bhat, 2023)…”

“…Specifically, it examines the economic asymmetry of new markets and how it leads to differences in digitalization and competitiveness among countries. This article is mainly concerned with identifying these disparities and their implications for the future (Bagul et al, 2023;Patil & Vhavale, 2023;Setiarini et al, 2023;Sharma & Bhat, 2023). Ndalamba (2019) has explored the problematic public policies and the leadership challenge for South Africa's socioeconomic transformation.…”

Unlocking the link between low emission supply chains, blockchain adoption, and financial success: The payoff of socially responsible practices in supply chains

“…In contrast, firms having environmentally friendly and low-maintenance technologies (i.e., BT-based applications) and clean energy electricity can firmly achieve cost-efficient leadership advantages and higher eco-performance (Suki et al, 2023). Admittedly, decreasing operating costs through using BT applications and green energy will ensure a higher gain in environmental performance (Setiarini et al, 2023).…”

“…In contrast, firms having environmentally friendly and low‐maintenance technologies (i.e., BT‐based applications) and clean energy electricity can firmly achieve cost‐efficient leadership advantages and higher eco‐performance (Suki et al, 2023). Admittedly, decreasing operating costs through using BT applications and green energy will ensure a higher gain in environmental performance (Setiarini et al, 2023). Therefore, integrating BT and clean energy in the manufacturing and distribution processes would reduce operating costs, while improving environmental performance at a promising level (Suki et al, 2023).…”

“…Besides that, the adoption of BT enhances traceability throughout the supply chain, allowing firms to verify and communicate their adherence to low‐emission standards. This traceability mitigates risks associated with environmental non‐compliance and fosters a positive corporate image (Setiarini et al, 2023). Such reputational benefits can lead to increased customer loyalty and, consequently, improved financial performance (Luu et al, 2023).…”