The Effect of Environmental, Social and Governance Consistency on Economic Results

Ferrero-Ferrero, Idoya; Izquierdo, María Ángeles Fernández; Torres, María Jesús Muñoz

doi:10.3390/su8101005

Cited by 85 publications

(95 citation statements)

References 62 publications

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“…The results were consistent with slightly improved coefficients, thus supporting the findings (results are not reported). It also confirms that firms' commitment through consistent environmental efforts constitutes an intangible value ensuring stakeholders' positive attitudes that leads to improvements in corporate performance [8,20].…”

Section: Multivariate Analysismentioning

confidence: 57%

“…Ortas et al [7] claim that firms that adopt environmental, social, and governance (ESG) principles require an organizational change that fosters stakeholder engagement which, in turn, contributes towards the firm's development through financial and non-financial incentives. Ferreri-Ferrero et al [8] highlight the generation of consistent competitive advantage in the ESG dimensions providing an intangible value that enhances firms' corporate financial performance. Several other research studies have recommended firms to develop core competencies and inimitable resources through environmental strategy so that they can sustain their competitiveness [20,25,[27][28][29].…”

Section: Relevant Literature and Hypothesis Developmentmentioning

confidence: 99%

“…Prior research qualitatively analyzes consumers' attitudes and behaviors toward firm's corporate social behaviors [4,5]. Many studies emphasize the several theoretical linkages of social and environmental efforts to enhance firms' performance and examine the effects on firm's profitability and market value [3,[6][7][8]. The financial performance of a firm largely depends on its sales, which ultimately reflects the consumers' response.…”

Section: Measurement Of Consumers' Responsementioning

confidence: 99%

“…Academia has indicated an increasing interest in the sustainable development of firms, which has produced several studies that investigate the effects of corporate environmental efforts. While examining the economic repercussions of corporate environmental efforts, focus has been limited to the evaluation of either consumers' responses or stockholders' expectations of corporate social activities [3][4][5][6][7][8][9]. Consumers' and stockholders' perceptions of an environmental strategy may vary greatly depending on their behavior, attitude, trust, exposure, and so on, and as such, it may yield inconsistent results [10,11].…”

Section: Introductionmentioning

confidence: 99%

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Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts

2017

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Abstract:This study aims to reveal that different stakeholders have different environmental preferences by demonstrating the managers' dilemma of selecting an appropriate environmental strategy to achieve firms' corporate goals. It analyzes the effects of firms' efforts in environmental impact through actual environmental practices and environmental considerations in environmental management on stockholders' and consumers' responses by using the Newsweek Green Rankings 2012 for large US-based firms. The study uses the event study methodology and the ordinary least squares multivariate regression model conditioned with relevant firm and industry-specific characteristics. The results indicate that both stockholders and consumers appreciate corporate efforts in reducing environmental damage; however, consumers exhibit a significant and negative response against firms' environmental management efforts. The conflicting results provide valuable insights into the alignment of environmental efforts for developing core competencies that lead firms toward sustainability. Further, this research makes a valuable contribution to the existing literature and provides guidelines for the formulation of public policies that encourage corporate environmental efforts to ensure simultaneous development of business and society.

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Section: Multivariate Analysismentioning

confidence: 57%

Section: Relevant Literature and Hypothesis Developmentmentioning

confidence: 99%

Section: Measurement Of Consumers' Responsementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts

2017

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“…Other methods for the estimation of firm-specific effects have been used in previous studies, such as panel data and stochastic frontier analysis [32,59,75,76], however, DEA presents a set of advantages over other methods used in previous studies, such as not imposing any functional form or distributional assumptions on the error term, and it fitted well for the available data in this work. Nevertheless, future studies testing the suitability of the combined stochastic frontier analysis to estimate firm capabilities, followed by an LCC analysis, would be desirable when appropriate data become available.…”

Section: Discussionmentioning

confidence: 88%

Capturing Firms’ Heterogeneity through Marketing and IT Capabilities in SMEs

Ramón-Jerónimo

Herrero

2017

Sustainability

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To achieve sustainability, firms capable of surviving economic recessions is of key relevance; the capabilities that firms need to face dynamic environments remain an open question. In this work, a new procedure is proposed to capture firms' heterogeneity with regard to the capabilities they possess in operating efficiently in dynamic environments. This approach enables the identification of the classes of firms that develop efficiency with a specific integration of resources. While the literature has most often measured firm capabilities using subjective measures, this study suggests the use of Data Envelopment Analysis to capture the ability to transform resources into outcomes and of Latent Class Regression to capture differences across firms that explain firms' heterogeneity in the way they perform. By combining these two techniques, this work presents a way to identify those firms that need to invest in and develop certain capabilities. This work analyses a large dataset of manufacturing Small Medium Enterprises (SMEs) extracted from the Business and Strategy survey provided by Fundación de la Sociedad Estatal de Participaciones Industriales( SEPI) in Spain. The dataset used enfolds 10,960 observations from 2048 firms during the period 1994-2011. The complete dataset has been employed to calculate manufacturing firms' efficiency. In a second step, data were cleaned to eliminate outliers, and to identify SMEs and observations with records of IT capabilities. As a result, 329 manufacturing SMEs were analysed to capture their heterogeneity. The results contribute to the current literature by explaining how manufacturing SMEs show a different need in their development of capabilities to be efficient and adapt to environmental changes. While approximately 20% of firms analysed really take advantage of recessions through their investment in R&D, the remaining 80% need to adjust their size or invest in IT capabilities to become competitive. The assumption shown in previous studies regarding the performance of SMEs to better confront recessions is discussed in this paper.

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Banks' environmental policy and business outcomes: The role of competition

Khattak

Saiti

2020

Bus Strat Env

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By integrating the two areas of competition–performance and environment–performance, this research explores if competition matters in the relationship between environmental practices and interest margins in the market. A panel of 458 banks from 74 countries for the period of 2006–2016 is used, and the sample is further divided into developed and developing countries. This paper uses the system Generalized Method of Moments estimator to tackle potential omitted variable bias, endogeneity, and simultaneity issues. Without competition, environmental practices only affect banks in developing countries; however, the results show a significant impact for the full sample, including developed countries, when the competition is taken into consideration, suggesting that competition might play a role in the relationship of environmental practices and interest margins. In the full sample, competition impacts the relationship negatively after a moderate level of competition is reached in the market. The environmental practices in developing countries are prone to competition in the market. In developed countries, the competition is found to be lightly positively moderating the impact of environmental practices on interest margins. Based on these findings, it is recommended that developing countries should have a low or moderate level of competition to encourage environmental practices. For developed countries, however, high competition should be preferred to encourage banks to consider environmental practices as one of their core business strategies. These findings are found robust to different statistical estimators.

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The Effect of Environmental, Social and Governance Consistency on Economic Results

Cited by 85 publications

References 62 publications

Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts

Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts

Capturing Firms’ Heterogeneity through Marketing and IT Capabilities in SMEs

Banks' environmental policy and business outcomes: The role of competition

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