IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i8p4570-d539879.html
   My bibliography  Save this article

The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy

Author

Listed:
  • Muhammad Zahid

    (Department of Management Sciences, City University of Science and IT, Peshawar 25000, Pakistan
    City University Center for Sustainability Studies (CUCSS), Peshawar 25000, Pakistan)

  • José Moleiro Martins

    (ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
    Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisboa, Portugal)

  • Haseeb Ur Rahman

    (Institute of Management Sciences, University of Science and Technology, Bannu 28100, Pakistan)

  • Mário Nuno Mata

    (ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
    Polytechnic Institute of Santarém, School of Management and Technology (ESGTS-IPS), 2001-904 Santarém, Portugal)

  • Syed Asim Shah

    (Department of Management Sciences, Attock Campus, COMSATS University Islamabad, Punjab 43600, Pakistan)

  • Pedro Neves Mata

    (ISTA-School of Technologies and Architecture, Instituto Universitário de Lisboa (ISCTE-IUL), ISTAR-IUL, Avenida das Forças Armadas, 1649-026 Lisboa, Portugal)

Abstract

This study aimed to investigate the impact of some important Sustainable Development Goals (SDGs), such as the decent workplace, climate change, and economic sustainability on firm financial performance (see Goals 8 and 13). By adopting an index from the previous literature, this study collected data from the annual and sustainability reports of the publicly listed companies of a developing country through content analysis from 2016 to 2018. The results revealed a significant increase in the level of compliance with workplace and environmental sustainability during the corresponding period. Furthermore, the estimations of ordinary least squares (OLS) and two-stage least squares (2SLS) panel data also unveiled a positive impact of workplace sustainability on the firm’s environmental and financial performance. Additionally, we noted that the findings were pronounced after addressing the problem of endogeneity. Moreover, the study also found a novel significant and positive mediating role of environmental sustainability in the relationship between workplace sustainability and the firm’s financial performance. This study has theoretical significance by proposing sustainability training and development as instrumental variables in the relationship of the workplace and environmental sustainability to firm financial performance. This study offers practical implications for regulatory bodies and business firms to integrate workplace and environmental sustainability practices into their routine operations for achieving sustainable industrialization.

Suggested Citation

  • Muhammad Zahid & José Moleiro Martins & Haseeb Ur Rahman & Mário Nuno Mata & Syed Asim Shah & Pedro Neves Mata, 2021. "The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy," Sustainability, MDPI, vol. 13(8), pages 1-14, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4570-:d:539879
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/8/4570/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/8/4570/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lois Mahoney & Robin W. Roberts, 2007. "Corporate social performance, financial performance and institutional ownership in Canadian firms," Accounting Forum, Taylor & Francis Journals, vol. 31(3), pages 233-253, September.
    2. Muhammad Zahid & Haseeb Ur Rahman & Musa Khan & Wajahat Ali & Fazaila Shad, 2020. "Addressing endogeneity by proposing novel instrumental variables in the nexus of sustainability reporting and firm financial performance: A step‐by‐step procedure for non‐experts," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3086-3103, December.
    3. Soytas, Mehmet Ali & Denizel, Meltem & Durak Usar, Damla, 2019. "Addressing endogeneity in the causal relationship between sustainability and financial performance," International Journal of Production Economics, Elsevier, vol. 210(C), pages 56-71.
    4. Tauseef Jamal & Muhammad Zahid & José Moleiro Martins & Mário Nuno Mata & Haseeb Ur Rahman & Pedro Neves Mata, 2021. "Perceived Green Human Resource Management Practices and Corporate Sustainability: Multigroup Analysis and Major Industries Perspectives," Sustainability, MDPI, vol. 13(6), pages 1-17, March.
    5. Jijun Gao & Pratima Bansal, 2013. "Instrumental and Integrative Logics in Business Sustainability," Journal of Business Ethics, Springer, vol. 112(2), pages 241-255, January.
    6. Harjoto, Maretno A. & Laksmana, Indrarini & Yang, Ya-wen, 2018. "Board diversity and corporate investment oversight," Journal of Business Research, Elsevier, vol. 90(C), pages 40-47.
    7. Abdirahman Anas & Hafiz Majdi Abdul Rashid & Hairul Azlan Annuar, 2015. "The effect of award on CSR disclosures in annual reports of Malaysian PLCs," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 11(4), pages 831-852, October.
    8. Marcus Wagner, 2005. "How to reconcile environmental and economic performance to improve corporate sustainability: corporate environmental strategies in the European paper industry," Post-Print hal-00279158, HAL.
    9. John Round & Colin C. Williams & Peter Rodgers, 2008. "Corruption in the post-Soviet workplace: the experiences of recent graduates in contemporary Ukraine," Work, Employment & Society, British Sociological Association, vol. 22(1), pages 149-166, March.
    10. Muzammel Shah, 2019. "Green human resource management: Development of a valid measurement scale," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 771-785, July.
    11. Kansal, Monika & Joshi, Mahesh & Batra, Gurdip Singh, 2014. "Determinants of corporate social responsibility disclosures: Evidence from India," Advances in accounting, Elsevier, vol. 30(1), pages 217-229.
    12. Heather Dixon-Fowler & Daniel Slater & Jonathan Johnson & Alan Ellstrand & Andrea Romi, 2013. "Beyond “Does it Pay to be Green?” A Meta-Analysis of Moderators of the CEP–CFP Relationship," Journal of Business Ethics, Springer, vol. 112(2), pages 353-366, January.
    13. Supriti Mishra & Damodar Suar, 2010. "Does Corporate Social Responsibility Influence Firm Performance of Indian Companies?," Journal of Business Ethics, Springer, vol. 95(4), pages 571-601, September.
    14. Marcus Wagner, 2013. "‘Green’ Human Resource Benefits: Do they Matter as Determinants of Environmental Management System Implementation?," Journal of Business Ethics, Springer, vol. 114(3), pages 443-456, May.
    15. Al-Tuwaijri, Sulaiman A. & Christensen, Theodore E. & Hughes, K. II, 2004. "The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 447-471.
    16. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
    17. Ivete Delai & Sérgio Takahashi, 2011. "Sustainability measurement system: a reference model proposal," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 7(3), pages 438-471, August.
    18. Amin Jan & Mário Nuno Mata & Pia A. Albinsson & José Moleiro Martins & Rusni Bt Hassan & Pedro Neves Mata, 2021. "Alignment of Islamic Banking Sustainability Indicators with Sustainable Development Goals: Policy Recommendations for Addressing the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(5), pages 1-38, March.
    19. Aguinis, Herman & Glavas, Ante, 2013. "Embedded Versus Peripheral Corporate Social Responsibility: Psychological Foundations," Industrial and Organizational Psychology, Cambridge University Press, vol. 6(4), pages 314-332, December.
    20. repec:eme:srjpps:v:6:y:2010:i:2:p:438-471 is not listed on IDEAS
    21. José Allouche & Patrice Laroche, 2005. "A Meta-analytical investigation of the relationship between corporate social and financial performance," Post-Print hal-00923906, HAL.
    22. Shuang Ren & Guiyao Tang & Susan Jackson, 2018. "Green human resource management research in emergence: A review and future directions," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 769-803, September.
    23. Linda O’Riordan & Jenny Fairbrass, 2008. "Corporate Social Responsibility (CSR): Models and Theories in Stakeholder Dialogue," Journal of Business Ethics, Springer, vol. 83(4), pages 745-758, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmad Ali Jan & Fong-Woon Lai & Muhammad Umar Draz & Muhammad Tahir & Syed Emad Azhar Ali & Muhammad Zahid & Muhammad Kashif Shad, 2022. "Integrating sustainability practices into islamic corporate governance for sustainable firm performance: from the lens of agency and stakeholder theories," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 2989-3012, October.
    2. Waseem Akhter & Arshad Hassan, 2024. "Does corporate social responsibility mediate the relationship between corporate governance and firm performance? Empirical evidence from BRICS countries," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 566-578, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Zahid & Haseeb Ur Rahman & Musa Khan & Wajahat Ali & Fazaila Shad, 2020. "Addressing endogeneity by proposing novel instrumental variables in the nexus of sustainability reporting and firm financial performance: A step‐by‐step procedure for non‐experts," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3086-3103, December.
    2. Úbeda-García, Mercedes & Claver-Cortés, Enrique & Marco-Lajara, Bartolomé & Zaragoza-Sáez, Patrocinio, 2021. "Corporate social responsibility and firm performance in the hotel industry. The mediating role of green human resource management and environmental outcomes," Journal of Business Research, Elsevier, vol. 123(C), pages 57-69.
    3. Dolores Gallardo-Vázquez & María J. Barroso-Méndez & María L. Pajuelo-Moreno & Julio Sánchez-Meca, 2019. "Corporate Social Responsibility Disclosure and Performance: A Meta-Analytic Approach," Sustainability, MDPI, vol. 11(4), pages 1-33, February.
    4. Haseeb Ur Rahman & Muhammad Zahid & Ali Muhammad, 2022. "Connecting integrated management system with corporate sustainability and firm performance: from the Malaysian real estate and construction industry perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 2387-2411, February.
    5. Fatimah Mahdy & Mohammad Alqahtani & Faiz Binzafrah, 2023. "Imperatives, Benefits, and Initiatives of Green Human Resource Management (GHRM): A Systematic Literature Review," Sustainability, MDPI, vol. 15(6), pages 1-31, March.
    6. Samy Garas & Osama El-Temtamy, 2020. "The “simultaneous cycle” between corporate social responsibility and firms’ financial performance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 39-50, September.
    7. Xingqiang Du & Jianying Weng & Quan Zeng & Yingying Chang & Hongmei Pei, 2017. "Do Lenders Applaud Corporate Environmental Performance? Evidence from Chinese Private-Owned Firms," Journal of Business Ethics, Springer, vol. 143(1), pages 179-207, June.
    8. Mahoney, Lois S. & Thorne, Linda & Cecil, Lianna & LaGore, William, 2013. "A research note on standalone corporate social responsibility reports: Signaling or greenwashing?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(4), pages 350-359.
    9. Tzouvanas, Panagiotis & Kizys, Renatas & Chatziantoniou, Ioannis & Sagitova, Roza, 2020. "Environmental disclosure and idiosyncratic risk in the European manufacturing sector," Energy Economics, Elsevier, vol. 87(C).
    10. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    11. Xiaoya Zhu & Yunli Zhu & Xiaohua Meng, 2021. "Government Environmental Information Disclosure and Environmental Performance: Evidence from China," Sustainability, MDPI, vol. 13(12), pages 1-22, June.
    12. Faisal Mahmood & Faisal Qadeer & Usman Sattar & Antonio Ariza-Montes & Maria Saleem & Jaffar Aman, 2020. "Corporate Social Responsibility and Firms’ Financial Performance: A New Insight," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    13. Tzouvanas, Panagiotis & Kizys, Renatas & Chatziantoniou, Ioannis & Sagitova, Roza, 2020. "Environmental and financial performance in the European manufacturing sector: An analysis of extreme tail dependency," The British Accounting Review, Elsevier, vol. 52(6).
    14. Markus Hang & Jerome Geyer‐Klingeberg & Andreas Rathgeber & Stefan Stöckl, 2018. "Economic Development Matters: A Meta‐Regression Analysis on the Relation between Environmental Management and Financial Performance," Journal of Industrial Ecology, Yale University, vol. 22(4), pages 720-744, August.
    15. Siddique, Md Abubakar & Akhtaruzzaman, Md & Rashid, Afzalur & Hammami, Helmi, 2021. "Carbon disclosure, carbon performance and financial performance: International evidence," International Review of Financial Analysis, Elsevier, vol. 75(C).
    16. Jieun Chung & Charles H. Cho, 2018. "Current Trends within Social and Environmental Accounting Research: A Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(2), pages 207-239, June.
    17. Hajer Tebini & Bouchra M'Zali & Pascal Lang & Blanca Perez‐Gladish, 2016. "The Economic Impact of Environmentally Responsible Practices," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(5), pages 333-344, September.
    18. Wolfgang Schultze & Ramona Trommer, 2012. "The concept of environmental performance and its measurement in empirical studies," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 375-412, January.
    19. Huirong Xie & Teck Chai Lau, 2023. "Evidence-Based Green Human Resource Management: A Systematic Literature Review," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    20. Mahmoud Alreahi & Zoltán Bujdosó & Moaaz Kabil & Ali Akaak & Kata Feketéné Benkó & Widhayani Puri Setioningtyas & Lóránt Dénes Dávid, 2022. "Green Human Resources Management in the Hotel Industry: A Systematic Review," Sustainability, MDPI, vol. 15(1), pages 1-25, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4570-:d:539879. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.