Research

26 pages, 747 KiB

Open AccessArticle

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

by Seyed Alireza Athari, Chafic Saliba, Elsa Abboud and Nourhan El-Bayaa

Sustainability 2024, 16(7), 2783; https://doi.org/10.3390/su16072783 - 27 Mar 2024

Viewed by 758

Abstract

The present study particularly aims to probe the quadratic effects of the combined and individual sovereign environmental, social, and governance (ESG) activities on the banking sector’s profitability. Furthermore, we attempt to shed light on the channels through which sovereign ESG practices impact the [...] Read more.

The present study particularly aims to probe the quadratic effects of the combined and individual sovereign environmental, social, and governance (ESG) activities on the banking sector’s profitability. Furthermore, we attempt to shed light on the channels through which sovereign ESG practices impact the banking sector’s profitability. Unlike the vast majority of prior works that investigated the sustainability practice–firms’ profitability nexus from the firm level, this study originally probes this relationship from the country level by considering the sovereign ESG sustainability activities. To attain this purpose, we focus on banking sectors operating in Gulf Cooperation Council (GCC) economies and employ the panel-fixed effects and panel-corrected standard errors approaches between 2000 and 2022. Remarkably, the findings uncover that the nexus between combined sovereign ESG and profitability is a non-linear and inversed U-shape (concave), implying that investing in sovereign ESG enhances the banking sector’s profitability. However, after exceeding an inflection point (0.349), its effect turns out to be negative and it develops into activities of destruction. Furthermore, the findings underscore that the association between individual sovereign environmental responsibility and the banking sector’s profitability is a non-linear U-shape (convex), while an inversed U-shaped (concave) nexus is uncovered for the individual sovereign social and governance activities. Moreover, the significant non-linear inverted U-shape for the combined sovereign ESG–stability nexus corroborates that financial stability is a channel through which sovereign ESG significantly impacts profitability. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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17 pages, 1376 KiB

Open AccessArticle

Unveiling the Impacts of Corporate Environmental, Social, and Governance Disclosure

by Nguyen Thi Thanh Binh and Hung-Chang Lee

Sustainability 2024, 16(6), 2459; https://doi.org/10.3390/su16062459 - 15 Mar 2024

Viewed by 727

Abstract

Amidst heightened scrutiny of corporate environmental, social, and governance (ESG) practices, this study employs threshold techniques combined with artificial neural networks to examine the impact of ESG disclosure on companies, emphasizing its pivotal role in promoting sustainability. Analyzing data from Taiwan’s 20 industries [...] Read more.

Amidst heightened scrutiny of corporate environmental, social, and governance (ESG) practices, this study employs threshold techniques combined with artificial neural networks to examine the impact of ESG disclosure on companies, emphasizing its pivotal role in promoting sustainability. Analyzing data from Taiwan’s 20 industries from 2012 to 2022, it finds that while ESG engagement positively influences financial performance, it also underscores the vital connection between corporate practices and sustainable development. This analysis explores the relationship between carbon emissions, operating expenses, and financial performance in the overall sample and a threshold sample based on a threshold variable. In the overall sample, carbon emissions significantly increase operating expenses, accompanied by other influential variables. Introducing a threshold value of firm size alters the dynamics, showing a positive and more pronounced impact in the threshold sample. The examination of financial performance metrics reveals significant positive associations with carbon emissions, particularly when the threshold is not met or exceeded. Intriguingly, subgroup analysis indicates a negative association between carbon emissions and financial performance within the larger-size subgroup, in stark contrast to a more pronounced positive relationship observed in the smaller-size subgroup. Furthermore, the developed ANN model exhibits robust learning capabilities, underscoring its efficacy in capturing complex patterns within the data. It suggests its potential as a reliable tool for accurately predicting carbon emissions across diverse scenarios, facilitating informed decision-making and policy formulation to mitigate environmental impact. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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16 pages, 1052 KiB

Open AccessArticle

Sustainability of Income Convergence in the European Union: Two Downturns—Two Different Stories

by Barbara Batóg and Jacek Batóg

Sustainability 2024, 16(3), 1339; https://doi.org/10.3390/su16031339 - 05 Feb 2024

Viewed by 654

Abstract

The aim of this paper is to apply the concept of marginal vertical income convergence to analyze the influence of the two last economic downturns (2007 and 2020) on the sustainability of the equalization of income levels within the European Union. The methodology [...] Read more.

The aim of this paper is to apply the concept of marginal vertical income convergence to analyze the influence of the two last economic downturns (2007 and 2020) on the sustainability of the equalization of income levels within the European Union. The methodology used enables us to avoid some restrictions of the classical analysis of income convergence. Income convergence models were estimated using data from the period 1993–2022, excluding the impact of outliers. The results confirm that we can observe the progressive process of the absolute income convergence for EU members, but there are significant differences between countries’ contributions to the process. These differences are caused by different paths of economic growth, and different mean resilience to economic crises, as well as different patterns of income inequalities. Their proper recognition allows us to develop efficient policies aimed at social cohesion, reducing income inequalities (the 10th Sustainable Development Goal), and sustainable economic development. Additionally, the estimated models indicated a definite different impact of the last two economic shocks on the European process of income convergence. The first shock significantly slowed down the income convergence process, while the second one was practically neutral in this context. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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14 pages, 307 KiB

Open AccessArticle

How Does Corporate Innovation Affect Sustainable Business Investment?

by Jinsu Kim and Hyunchul Lee

Sustainability 2023, 15(18), 13367; https://doi.org/10.3390/su151813367 - 06 Sep 2023

Cited by 1 | Viewed by 784

Abstract

This study examines the impact of corporate innovation on sustainable business investments of companies listed on the Korea exchange from 2011 to 2019. To this end, our study applies Hennessy’s investment model, which presents the relationship between corporate investment and Tobin’s mean

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[...] Read more.

This study examines the impact of corporate innovation on sustainable business investments of companies listed on the Korea exchange from 2011 to 2019. To this end, our study applies Hennessy’s investment model, which presents the relationship between corporate investment and Tobin’s mean

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in a probabilistic space. We find evidence of a positive relationship between corporate investment and Tobin’s average

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. Greater corporate growth opportunities lead to greater business investments, whereas the expected recovery ratio of debt capital has a negative relationship with corporate investments. The innovation performance variable is positively associated with the investments. Our results are suggestive of business investments being determined by investment outcomes, rather than the financial resource inputs for corporate innovation. Our study holds significance not only in the academic dimension, but also in policymaking. Since corporate growth is the outcome of corporate investments, the government may establish and implement economic policies that induce such investments. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

16 pages, 579 KiB

Open AccessArticle

The Impact of Environmental Management on Labour Productivity

by Anton Nugent and Dragana Radicic

Sustainability 2023, 15(16), 12256; https://doi.org/10.3390/su151612256 - 11 Aug 2023

Viewed by 1226

Abstract

The green transition and green economic growth are policy priorities in the European Union. In this context, this study estimates the effects of environmental management on firm performance, in particular labour productivity. There is currently a lack of empirical evidence on this topic, [...] Read more.

The green transition and green economic growth are policy priorities in the European Union. In this context, this study estimates the effects of environmental management on firm performance, in particular labour productivity. There is currently a lack of empirical evidence on this topic, although it is of great importance due to the increasing need for environmental practices across the globe. Therefore, to address this gap, we explore the relationship between several environmental variables on labour productivity, through the use of cross-sectional firm-level data. These data were obtained using the sixth wave of the Business Environment and Enterprise Survey (BEEPS VI). This study focuses on ten EU countries. The results obtained from the empirical analysis reveal that firms who employ an environmental manager and firms that are subject to energy taxes or levies both have higher productivity than those who do not; thus, firms that have employed or are subject to certain environmental practices reap the benefits of higher labour productivity. Furthermore, firms that use renewable energy have higher labour productivity than those that do not. Therefore, the results obtained allowed us to draw implications for both policy makers and managers. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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47 pages, 2915 KiB

Open AccessArticle

Circular Business Model Value Dimension Canvas: Tool Redesign for Innovation and Validation through an Australian Case Study

by Md Tasbirul Islam and Usha Iyer-Raniga

Sustainability 2023, 15(15), 11553; https://doi.org/10.3390/su151511553 - 26 Jul 2023

Cited by 4 | Viewed by 2726

Abstract

Circular business models (CBMs) are integral to the concept of the circular economy (CE). The aims of the study are to (1) redesign a canvas for CBM and (2) validate it through a single case study. The developed canvas is called the “Circular [...] Read more.

Circular business models (CBMs) are integral to the concept of the circular economy (CE). The aims of the study are to (1) redesign a canvas for CBM and (2) validate it through a single case study. The developed canvas is called the “Circular Business Model Value Dimension Canvas”. For the validation, a semi-structured interview with a social enterprise (SE) operating in hybrid CBM (i.e., resource recovery, sharing platform, and product use extension) in Australia has been performed. Results showed that a successful hybrid CBM for a SE necessitates the integration of forward and reverse supply chains through partnerships with new product retailers and resource recovery companies. Other important factors include the presence of physical stores, an effective product return strategy, initial funding support from the government, the employment of young individuals with special needs, and the promotion of behavioral change among low-income customer segments. Although the canvas was applied to the enterprise, it can also be applied to other organizations as the canvas integrates all essential components for business modeling. The proposed canvas serves as a supportive tool for CBM innovation (CBMI) and provides a framework for researchers to investigate the CBMI process in organizations transitioning from linear to circular. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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24 pages, 2054 KiB

Open AccessArticle

General Fundraising Trends among University Patrons and Entrepreneurs to Promote the Sustainability of Universities

by Laila Kundzina, Baiba Rivza, Liva Grinevica and Peteris Rivza

Sustainability 2023, 15(14), 10868; https://doi.org/10.3390/su151410868 - 11 Jul 2023

Viewed by 1338

Abstract

One of the most important issues for higher education institutions is achieving financial viability and sustainability by expanding revenue sources, as the costs associated with ensuring the operation of higher education institutions is increasing. Therefore, raising funds through donations for universities means new [...] Read more.

One of the most important issues for higher education institutions is achieving financial viability and sustainability by expanding revenue sources, as the costs associated with ensuring the operation of higher education institutions is increasing. Therefore, raising funds through donations for universities means new challenges. Within the framework of this study, the authors have drawn attention to attracting funds to universities from patrons of universities and companies, providing a detailed analysis of trends in this field. The purpose of this study was to analyze the general trends in fundraising among university patrons and businessmen, and to identify possible solutions that could help in attracting donations to universities and promote their sustainability in the future. The research methodology applied in this research included analysis of the literature, conducting surveys, and analysis using statistical methods such as the correlation method, chi-squared test, and ANOVA. This study provides an insight into the situation in Latvia regarding the trends of patrons and entrepreneurs donating to universities. The results of this study show that philanthropic organizations should work on building a feedback relationship with patrons to promote as much fundraising as possible. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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12 pages, 833 KiB

Open AccessArticle

The Relationship between Democracy and Economic Growth in the Path of Sustainable Development

by Hosein Mohammadi, Flavio Boccia and Amirhossein Tohidi

Sustainability 2023, 15(12), 9607; https://doi.org/10.3390/su15129607 - 15 Jun 2023

Viewed by 7369

Abstract

Democracy has both a direct and an indirect relationship with sustainable development. Democracy is related to the movement toward long-term economic development directly, and indirectly, democracy can provide the means to create the institutional structures needed to create links between the political systems, [...] Read more.

Democracy has both a direct and an indirect relationship with sustainable development. Democracy is related to the movement toward long-term economic development directly, and indirectly, democracy can provide the means to create the institutional structures needed to create links between the political systems, the culture of participation, and the social values of a society. Since economic development is a multidimensional concept and one of its primary requirements is to achieve a high level of income and appropriate economic growth, knowing the relationship between democracy and economic growth is especially important for policymakers. Many important questions are raised about the relationship between democracy and economic performance. What is the relationship between democracy and economic growth? Is this relationship different in developed countries and developing countries? Considering the effects of democracy and economic growth on the welfare of communities, the main purpose of this study was to investigate the causal relationship between democracy and economic growth from 1990–2020 for the OECD and selected developing countries. The results showed that the conflict and skeptical hypotheses had been established in OECD and developing countries, respectively. It was concluded that the pattern of economic growth and development in OECD countries differed from that in developing countries. For OECD countries, real per capita GDP growth was mainly affected by previous per capita GDP growth, and the effect of democracy on per capita economic growth was negative. Moreover, the results indicated that in developing countries, democracy alone had not triggered economic growth and that real per capita GDP growth depended on other important structural variables such as social and physical infrastructure. Full article

(This article belongs to the Special Issue Sustainability in Business Development and Economic Growth)

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