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Sustainable Investment: Interrelated among Corporate Governance, Economic Performance and Market Risks Using Investor Preference Approach

Author

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  • Ming-Lang Tseng

    (Institute of Innovation & Circular Economy, Asia University, Taichung City 41354, Taiwan
    Department of Medical Research, China Medical University, Taichung City 40402, Taiwan)

  • Phan Anh Tan

    (Institute of Innovation & Circular Economy, Asia University, Taichung City 41354, Taiwan
    Department of Business Administration, Asia University, Taichung City 41354, Taiwan)

  • Shiou-Yun Jeng

    (Institute of Industrial Engineering and Management, National Yunlin University of Science and Technology, Taichung City 64002, Taiwan)

  • Chun-Wei Remen Lin

    (Institute of Innovation & Circular Economy, Asia University, Taichung City 41354, Taiwan)

  • Yeneneh Tamirat Negash

    (Institute of Innovation & Circular Economy, Asia University, Taichung City 41354, Taiwan
    Department of Business Administration, Asia University, Taichung City 41354, Taiwan)

  • Susilo Nur Aji Cokro Darsono

    (Department of Business Administration, Asia University, Taichung City 41354, Taiwan
    Department of Economics, Universitas Muhammadiyah Yogyakarta, Yogyakarta 55183, Indonesia)

Abstract

Prior studies are lacking on the drivers of sustainable investment. Hence, this study examines the relationship between the social aspects, environmental aspects, economic benefits, market conditions, and corporate governance issues on sustainable investment. Sustainable investment has been rising since the last decade. However, sustainable investment is preceded by ethical investment, green investment, and socially responsible investment. In order to understand the sustainability of an investment before decision-making, it proposed a set of attributes to measure its sustainability using investor’s linguistics preferences. The proposed attributes are interrelated and based on investor’s linguistic preferences. The study employs the fuzzy set theory to handle the uncertainty resulting from the vagueness of linguistic terms and applies decision making trial and evaluation laboratory (DEMATEL) to determine the nature of interrelationships among sustainable investment attributes. The result indicates that corporate governance, economic performance, and market risks are the causal aspects of sustainable investment. In addition, this study found that transparency, anti-corruption, and board diversity were the two most important criteria of corporate governance. Furthermore, the three most important criteria of economic performance presented the model were excess return, market value, and shareholder loyalty. The theoretical and practical implications of sustainable investment are discussed.

Suggested Citation

  • Ming-Lang Tseng & Phan Anh Tan & Shiou-Yun Jeng & Chun-Wei Remen Lin & Yeneneh Tamirat Negash & Susilo Nur Aji Cokro Darsono, 2019. "Sustainable Investment: Interrelated among Corporate Governance, Economic Performance and Market Risks Using Investor Preference Approach," Sustainability, MDPI, vol. 11(7), pages 1-15, April.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:7:p:2108-:d:221111
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    References listed on IDEAS

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    3. Preeti Sharma & Priyanka Panday & R. C. Dangwal, 2020. "Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 208-217, December.
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    7. Zoltán Csedő & József Magyari & Máté Zavarkó, 2022. "Dynamic Corporate Governance, Innovation, and Sustainability: Post-COVID Period," Sustainability, MDPI, vol. 14(6), pages 1-21, March.
    8. Iqbal Owadally & Jean-René Mwizere & Neema Kalidas & Kalyanie Murugesu & Muhammad Kashif, 2021. "Long-Term Sustainable Investment for Retirement," Sustainability, MDPI, vol. 13(9), pages 1-22, April.
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