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Under what conditions does it pay to be sustainable? Sources of heterogeneity in corporate sustainability impacts

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  • Al Abri, Ibtisam
  • Bi, Xiang
  • Mullally, Conner
  • Hodges, Alan

Abstract

Empirical evidence on the effect of adopting corporate sustainability (CS) practices on a firm’s financial performance has been mixed. Using panel data from 463 US firms, we employ propensity score matching (PSM), Difference-in-Differences (DID), and Quantile DID to examine the extent to which a firm’s size, CS adoption intensity, and industry sector affected its financial performance from 2000 to 2012. Our findings suggest CS adoption had heterogeneous effects on corporate financial performance.

Suggested Citation

  • Al Abri, Ibtisam & Bi, Xiang & Mullally, Conner & Hodges, Alan, 2017. "Under what conditions does it pay to be sustainable? Sources of heterogeneity in corporate sustainability impacts," Economics Letters, Elsevier, vol. 159(C), pages 15-17.
    • Handle: RePEc:eee:ecolet:v:159:y:2017:i:c:p:15-17
    DOI: 10.1016/j.econlet.2017.07.013
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    References listed on IDEAS

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    1. Shih‐Fang Lo & Her‐Jiun Sheu, 2007. "Is Corporate Sustainability a Value‐Increasing Strategy for Business?," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 345-358, March.
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    9. Robert G. Eccles & Ioannis Ioannou & George Serafeim, 2014. "The Impact of Corporate Sustainability on Organizational Processes and Performance," Management Science, INFORMS, vol. 60(11), pages 2835-2857, November.
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    Cited by:

    1. Encarna Guillamon-Saorin & Magdalena Kapelko & Spiro E. Stefanou, 2018. "Corporate Social Responsibility and Operational Inefficiency: A Dynamic Approach," Sustainability, MDPI, vol. 10(7), pages 1-26, July.
    2. Ahmad Salman & Ali Al-Hemoud & Saja A. Fakhraldeen & Maha Al-Nashmi & Suad M. AlFadhli & Sungsoo Chun, 2020. "Research and Development as a Moderating Variable for Sustainable Economic Performance: The Asian, European, and Kuwaiti Models," Sustainability, MDPI, vol. 12(18), pages 1-17, September.
    3. Ruy de Castro Sobrosa Neto & Carlos Rogério Montenegro de Lima & Daniel Goulart Bazil & Manoela de Oliveira Veras & José Baltazar Salgueirinho Osório de Andrade Guerra, 2020. "Sustainable development and corporate financial performance: A study based on the Brazilian Corporate Sustainability Index (ISE)," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(4), pages 960-977, July.
    4. Dariusz Klimek, 2020. "Sustainable Enterprise Capital Management," Economies, MDPI, vol. 8(1), pages 1-10, February.

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    More about this item

    Keywords

    Corporate sustainability; Corporate financial performance; Quantile difference in differences; Dow Jones sustainability index; Propensity score matching;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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