The moderating effect of corporate governance on the relationship between corporate sustainability performance and corporate financial performance

2020 ◽  
Author(s):  
Lucy W. Lu
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Corporate Sustainability ◽  
Moderating Effect ◽  
Corporate Financial Performance ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
The Relationship

scholarly journals Relationship between corporate sustainability performance and corporate financial performance: evidence from U.S. companies

Equilibrium ◽  
2021 ◽  
Vol 16 (4) ◽  
pp. 885-906
Author(s):  
Agnieszka Matuszewska-Pierzynka
Keyword(s):  
Financial Performance ◽  
Empirical Research ◽  
Empirical Studies ◽  
Corporate Sustainability ◽  
Value Added ◽  
Corporate Financial Performance ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
The Relationship ◽  
A Company

Research background: Sustainable development at the enterprise level is understood as the integration of economic, environmental and social dimensions aimed at meeting the needs of all firm?s stakeholders in the present and in the future. Therefore, it is crucial to evaluate the relationship between economic, environmental and social sustainability performance of a company and its financial performance. Purpose of the article: Considering the business model for sustainability as well as the debatable results of empirical research on the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP), the essential aim of the paper is to answer the question whether the improvement of corporate sustainability performance in its all particular dimensions brings about higher total revenues (TR) of a company. Methods: The main method of empirical research is panel regression models based on Cobb-Douglas production function, which has been extended to include variables of corporate sustainability scores. The selection between pooled OLS model, random-effects model and fixed-effects model has been made with the use of the F test, the Breusch-Pagan test and the Hausman test. Additionally, descriptive statistics and the Pearson correlation coefficients have been analyzed. The empirical studies were conducted in the period 2014?2019 among the 59 largest U.S. companies listed in the Fortune 500 ranking between 2015?2020. Findings & value added: The research hypothesis assuming the existence of positive relationship between corporate sustainability performance (CSP) at both aggregate and disaggregate levels and corporate financial performance (CFP) expressed by TR cannot be positively verified. It means that the improvement of corporate sustainability performance in environmental, social and governance dimensions does not lead to an increase in TR of a company, as some empirical studies suggest.

scholarly journals CORPORATE SUSTAINABILITY PERFORMANCE AND FINANCIAL PERFORMANCE: MODERATING EFFECT OF BOARD COMPOSITION

2021 ◽  
Vol 4 (2) ◽  
pp. 245-256
Author(s):  
Ferina Nurlaily ◽  
Ahadiyah Adinia Rahmi
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Corporate Sustainability ◽  
Linear Regression Analysis ◽  
Moderating Effect ◽  
Independent Directors ◽  
Sustainability Performance ◽  
Female Directors ◽  
Corporate Sustainability Performance ◽  
Study Results

This study analyzes the moderating effect of the composition of female directors and the composition of independent directors on CSP and ROA. The purpose of this study is to analyze the effect of the disclosure of Corporate Sustainability Performance (CSP) on the Return on Assets (ROA) as a proxy for the company's financial performance. The population of this study is companies listed on the SRI-KEHATI index during the period November 2016– October 2019. The research hypotheses were tested using linear regression analysis and moderated regression analysis. The study results found that CSP has a significant effect on the company's ROA. The better and more complete the CSP disclosure, the higher the ROA. Furthermore, the composition of female and independent directors does not significantly affect CSP on corporate financial performance. This study implies that female directors and the composition of the independent board are more for compliance with regulatory requirements.

Which Factors Moderate the Relationship between Sustainability Performance and Financial Performance? A Meta-Analysis Study

2015 ◽  
Vol 15 (1) ◽  
pp. 1-15 ◽  
Author(s):  
Wenxiang (Lucy) Lu ◽  
Martin E. Taylor
Keyword(s):  
Financial Performance ◽  
Sample Size ◽  
Environmental Sustainability ◽  
Meta Analysis ◽  
Corporate Sustainability ◽  
Total Sample ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Long Run ◽  
The Relationship

ABSTRACT The relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP) has long been debated. Ullman (1985) pointed out that the conflicting results could be influenced by many factors, such as sample size, industrial context, inconsistent measurement of CSP and CFP, research methodologies, and procedures for data collection and analysis. This paper addresses Ullman's (1985) concerns by providing a more methodologically rigorous review of the CSP-CFP relationship than prior research studies. A meta-analysis of 198 studies yields a total sample size of 31,514 observations. The meta-analytic findings suggest that sustainability performance likely increases a firm's financial performance, especially in the long run. Compared to social sustainability, environmental sustainability, to a larger extent, contributes to the positive CSP-CFP relationship. In addition, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators. Multi-industry, pre-2000 studies, and non-U.S. sample firms seem to show a stronger impact on the positive relationship between CSP and CFP than other sample indicators. A final finding is that the methodology used in the analysis has a significant impact on the results.

CEO behavior and sustainability performance: the moderating role of corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amel Kouaib ◽  
Asma Bouzouitina ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Corporate Sustainability ◽  
Least Square ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Impact

PurposeThis paper explores how the tension between a firm's CEO overconfidence feature and externally observable hubris attribute may determine the level of corporate sustainability performance. This work also contemplates the impact of the moderator “corporate governance practices.”Design/methodology/approachThis study uses a sample of 658 firm-year-observations using a sample of European real estate firms indexed on Stoxx Europe 600 Index from 2006 to 2019. To test the developed hypotheses, feasible generalized least square (FGLS) regression is applied.FindingsFindings suggest that a good corporate governance score strengthens the positive effect of the psychological bias (CEO overconfidence) on corporate sustainability performance while it fails to attenuate the negative effect of the cognitive bias (CEO hubris).Research limitations/implicationsThe research provides an overview of the impact of CEO personality traits on the corporate sustainability performance level in the European real estate sup-sector. As corporate governance can have a major impact to control these traits, the authors recommend European real estate companies to improve their corporate governance practices.Originality/valueThis study contributes to the existent literature this gap with two empirical novelties: (1) providing a novel insight into sustainability involvement using a sample of European real estate sup-sector and (2) investigating the moderating effect on the link between CEO psychological and cognitive biases and sustainability performance. This study provides empirical evidence that entrenchment problems arising from CEO hubris would not be mitigated by a good corporate governance practice.

scholarly journals PENGARUH KINERJA KEUANGAN TERHADAP NILAI PERUSAHAAN DENGAN PENGUNGKAPAN CSR DAN GCG SEBAGAI VARIABEL PEMODERASI

2010 ◽  
Vol 10 (2) ◽  
pp. 41
Author(s):  
Hidayatullah ,
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Stock Exchange ◽  
Value Added ◽  
Corporate Financial Performance ◽  
Corporate Value ◽  
Moderating Variables ◽  
Good Corporate Governance ◽  
Relationship Of ◽  
The Relationship

<p class="Style1">This Thesis investigated the influence of financial performance toward corporate value by exposing Corporate Sosial Responsibility (CSR) and Good Corporate Governance (GCG) as Moderating Variables. Corporate Financial performance as independent variable is represented by the Financial Value Added (FVA) and Corporate Value as Dependent Variable is represented by Tobin `s Q value. CSR value is indexed based on the 78 items of exposure themes and GCG value is indexed using the 18 items of exposure themes which the researcher called Corporate Governance Perception Index. After selecting 149 companies listed in Indonesia Stock Exchange, the researcher found 39 manufacture companies<sup>.</sup>  qualified as the research objects based on the defined criteria, with observation timeframe from the year of2005 to 2008. The result of the research concludes that: Financial Performance (FVA) significantly influences the corporate value (Tobins 'Q); Corporate Sosial Responsibility also influences the relationship of corporate financial performance and the corporate value; and Good Corporate Governance influences the relationship of corporate financial performance and the corporate value as well.</p><p class="Style1">Keywords: Financial value Added, Tobin 's Q, CSR, GCG</p>

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