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The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment

Author

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  • Beatriz Lopes Cancela
  • Maria Elisabete Duarte Neves
  • Lúcia Lima Rodrigues
  • António Carlos Gomes Dias

Abstract

Purpose - In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social. Design/methodology/approach - This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated. Findings - The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern. Originality/value - To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.

Suggested Citation

  • Beatriz Lopes Cancela & Maria Elisabete Duarte Neves & Lúcia Lima Rodrigues & António Carlos Gomes Dias, 2020. "The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 28(4), pages 785-806, August.
    • Handle: RePEc:eme:ijaimp:ijaim-05-2020-0068
    DOI: 10.1108/IJAIM-05-2020-0068
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    Citations

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    Cited by:

    1. Patrick Velte, 2024. "Sustainable board governance and environmental performance: European evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3397-3421, May.
    2. Wafa Mohammad Abdaljabar & Norhayati Zakuan & Muhamad Zameri Mat Saman & Mariam Setapa, 2024. "The Practice of Enterprise Risk Management and Sustainable Performance in Jordan," Information Management and Business Review, AMH International, vol. 16(1), pages 329-342.
    3. Patrick Velte, 2023. "Sustainable institutional investors and corporate biodiversity disclosure: Does sustainable board governance matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3063-3074, November.

    More about this item

    Keywords

    Corporate sustainability; Corporate governance; Panel data; Firm-specific characteristics; Macroeconomic factors; Iberian Peninsula; G38; C33; Q56;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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