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This study revisits the relationship between environmental, social and governance (ESG) activities and firm performance. More importantly, it tests whether this relationship is moderated by critical yet underexplored factors such as stakeholder engagement, financial constraints, and religiosity.

A wide range of estimation techniques, including pooled ordinary least squares (OLS), fixed effects, system generalized method of moments (GMM) and propensity score matching-difference-in-differences (PSM-DiD), are employed to investigate such issues in a large sample of firms from 31 countries.

ESG performance has a positive and significant impact on firm performance. While stakeholder engagement positively moderates this relationship, financial constraints and religiosity negatively moderate it. Interestingly, this positive linkage is driven by environmental and social performance rather than governance performance.

Firms should proactively engage in ESG initiatives and consider the intervening influences of stakeholder engagement, financial constraints and religiosity in making decisions to invest in ESG activities. Furthermore, our findings can help policymakers understand the financial consequences of ESG practices, which can be helpful in designing new policies to further promote corporate engagement in ESG practices.

First, our research findings help reconcile the long-standing debate about the value impact of ESG. Second, our paper investigates relatively new aspects of the ESG-firm performance relationship. Third, our study offers more insight into the ESG literature by showing that not all ESG dimensions equally impact firm performance.

We examine the impact of corporate sustainability performance (CSP) on corporate cash holdings, focusing on the moderating impacts of industry’s concentration, financial constraints, and institutional environments.

The empirical analysis is conducted on a sample of 31 countries from 2002 to 2018. We use the pooled OLS regressions controlling for fixed effects. We further address endogeneity issues using an instrumental variable approach, the Difference-in-Differences regression based on an exogenous shock, and the propensity score matching.

We find that firms with superior CSP hold more cash. This result is valid after a series of tests for robustness and endogeneity issues, suggesting a causal effect of CSP on corporate cash holdings. In the cross section, the positive impact of CSP on cash holdings is more pronounced for firms operating in highly concentrated industries, but attenuated for firms with financial constraints and for those operating in countries with better institutional environments. We further show that CSP affects cash holdings through the channel of financial distress risk.

In making investment decisions, investors should not only examine corporate financial performance and sustainability profile, but also understand the related cash holding levels and financial distress costs. Corporate managers making decisions on levels of cash holdings should pay more attention to their sustainability behavior, especially for firms operating in concentrated industries and/or facing financial constraints. Governments and authorities can apply regulations to encourage firms to engage more in sustainable activities, as well as establish good institutional environments in the country.

Using a comprehensive international dataset, our paper contributes to two strands of literature: the economic impact of CSP and the driver of cash holdings. We further focus on the moderating role of industry concentration and firms’ financial constraints. Our international sample also allows us to exploit the effect of country-level informal institutions.

This empirical research investigates the impact of board nationality diversity on the efficiency of banks. Additionally, our analysis examines the interacting impact of women's representation on bank boards in the correlation between nationality diversity on board and bank efficiency.

This research utilizes a dataset comprising banks operating in the MENA countries over an eight-year period. We apply diverse statistical methodologies, with Ordinary Least Squares (OLS) being the primary econometric analysis, alongside several robustness tests.

The research results offer important insights into the importance of board nationality diversity, as well as its interaction with the inclusion of women on boards. The findings indicate that having foreign directors on bank boards enhances efficiency. Furthermore, they suggest that increased women representation on boards improves the positive correlation between presence of foreign directors in boardrooms and efficiency of banks, thereby mitigating agency problems and enhancing governance practices.

These results carry substantial implications for legislators across the MENA countries. Advocating for diversity policies within banks to encourage the inclusion of foreign directors on their boards could lead to efficiency enhancements. Furthermore, policymakers might explore the implementation of quotas or directives to bolster gender heterogeneity within board appointments, ultimately fostering improved bank efficiency and bolstering competitiveness within the region.

This study breaks new ground by investigating how board nationality diversity affects efficiency of banking sector in the MENA countries. It stands out for examining the moderating role of women representation on boards, offering novel insights into how these factors interact.

The aim of this paper was to analyze the role of the Cooperative of Farmers and Fishermen of the Lago do Cuniã Extractive Reserve (COOPCUNIÃ) in the inclusion of residents in the caiman meat value chain in Porto Velho, Brazil.

A total of six interviews were conducted with key actors to investigate the research problem in the Lago do Cuniã EXRES, namely the president and project advisor of the cooperative, two extractivist members of the cooperative and two non-member residents. The key actors were selected based on the following criteria: being over 18 years old, residing within the reserve and having participated in some stage of the caiman meat value chain.

The results demonstrate that the cooperative contributes to the inclusion of extractivist residents in the value chain, income generation and poverty reduction, enabling the production and marketing of caiman meat. Additionally, it overcomes challenges and improves the quality of life of the local population.

This study emphasizes the social and economic benefits for isolated regions with low productive development. For public policymakers, the results demonstrate that inclusion has enabled access to technology and markets. For the cooperative, it showcases actions oriented towards development, social inclusion and quality of life.

The originality of the article lies in the analysis of the role of a value chain within an environmental protection area in the Amazon, balancing economic, social and environmental factors.

O objetivo foi analisar o papel da Cooperativa dos Agricultores e Pescadores da Reserva Extrativista Lago do Cuniã (COOPCUNIÃ) na inclusão dos moradores na cadeia de valor da carne de jacaré em Porto Velho, Brasil.

Foram realizadas 06 (seis) entrevistas com atores-chave para investigar o problema de pesquisa na RESEX Lago do Cuniã, a saber: o presidente e o assessor de projetos da cooperativa, dois extrativistas cooperados e dois moradores não cooperados. Os atores-chave foram selecionados com base nos seguintes critérios: ser maior de 18 anos, residir na reserva e ter participado de alguma etapa da cadeia de valor da carne de jacaré.

Os resultados demonstram que a cooperativa contribui para a inclusão dos extrativistas na cadeia de valor, com a geração de renda e redução da pobreza, viabilizando a produção e comercialização da carne de jacaré. Além disso, supera desafios e melhora a qualidade de vida da população local.

Este estudo enfatiza os benefícios sociais e econômicos para regiões isoladas e com baixo desenvolvimento produtivo. Para os formuladores de políticas públicas, os resultados demonstram que a inclusão possibilitou o acesso à tecnologia e aos mercados. Para a cooperativa, mostra ações voltadas para o desenvolvimento, inclusão social e qualidade de vida.

A originalidade do artigo está na análise do papel de uma cadeia de valor dentro de uma área de proteção ambiental na Amazônia, equilibrando fatores econômicos, sociais e ambientais.

This study aims to examine the influence of geopolitical risk (GPR) on corporate cash holdings in an emerging market, India. It also investigates whether the effect of GPR on cash holdings varies across financially constrained and unconstrained firms, and across the different sectors.

This study uses the fixed-effect regression model to examine the effect of GPR on the corporate cash holdings of 2090 Indian firms from 2003 to 2021. To correct the potential endogeneity issue and ensure the robustness of the results, this study uses two-stage least squares regression, alternative cash holdings proxies, GPR measures and across the different periods (Global financial crisis and COVID-19).

The paper finds that GPR has a positive impact on the cash holdings of Indian firms. The authors also find that the positive relationship between GPR and cash holdings is consistent for financially constrained and unconstrained firms. Furthermore, the results also show that firms in the construction sector maintain higher cash reserves than other sectors.

To the best of the authors’ knowledge, this study is one of the first-ever studies which examines the effect of GPR on corporate cash holding for an emerging economy like India. The use of alternative measures of cash holding, GPR, and estimation methods make this study more robust.

The purpose of this paper is to validate the theoretical finding that digital MNEs avoid physical presence norms of permanent establishment and royalty characterization rules for business and royalty taxation, respectively, to escape tax incidence in the market economy, using information, communication and technology features and transfer pricing (TP) manipulations.

Multiple case studies of MNEs from technology sector, based on judicial decisions in 141 cases, over taxability of profits earned from Indian economic activities. Additional in-depth case study of the Uber Group to study the tax avoidance structures under platform economy, by routing of Indian profits through The Netherlands, a tax haven.

The study finds a significant number of digital MNEs earning profits from India and avoiding tax by defying physical presence and royalty characterization. In majority of the cases, demand-side business activities are discharged through incorporating and remunerating affiliates at cost plus low markup, thus avoiding tax incidence, using TP manipulations under the arm’s length principle applied by governments for benchmarking the intragroup transactions of the MNEs.

The research findings validate the view that digital features promote tax avoidance in the market economy.

The originality of the study lies in the validation of profit shifting through digital features from the developing market economy and portending that digital MNEs defy physical presence to avoid business taxation through TP manipulations.

This research investigates whether focal firms employ strategic supply chain information disclosure, focusing on the concealment of supplier and customer identities, as part of their supply chain environmental risk management strategies (supplier sustainability risk and customer loss risk, respectively).

Using a panel dataset of Chinese listed firms from 2009 to 2019 and utilizing the suppliers’ environmental punishment of peer firms (peer events) as an exogenous shock and employing ordinary least squares (OLS) estimation, this study conducts a regression analysis to test how focal firms disclose the identities of their suppliers and customers.

Our results indicate that focal firms prefer to hide the identities of their suppliers and customers following the environmental punishment of peer firms’ suppliers. In addition, supplier concentration weakens the effect of withholding supplier identities, whereas customer concentration strengthens the effect of hiding customer identities. Mechanism analysis shows that firms hide supplier identities to avoid their reputation being affected and hide customer identities to prevent the deterioration of customers’ reputations and thus impact their market share.

Our study reveals that reputation spillover is another crucial factor in supply chain transparency. It is also pioneering in applying the anonymity theory to explain focal firms’ information disclosure strategy in supply chains.

This study examines the impact of the US government customer concentration and product innovation in supplier firms. The US government customer concentration is defined as the proportion of sales made by a supplier firm to the US government as a major customer. To measure product innovation, the author uses two key metrics: the number of patents and the novelty of the patents. The results indicate that a supplier firm’s relationship with the US government, as measured by the tenure of the relationship, has a significant impact on product innovation. Furthermore, the author shows that changes in the composition of the US government, Senate can also affect the level of innovation in supplier firms.

This study employs the Compustat’s Segment Customer database and the National Bureau of Economic Research (NBER) Patent Citation database to gather information regarding patents granted by the United States Patent and Trademark Office (USPTO). The author also incorporates data from US Congressional committees from the 96th to 115th Congresses to assess the effect of changes in seniority of US senators on influential committees on the firm’s innovation. For a robustness test, the author utilizes a propensity score matched analysis.

The author demonstrates that a firm’s dependence on the US government as a customer channel for an extended period negatively impacts the firm’s innovation efficiency, as measured by the number of patents, citations and novelty of the patents. In addition, the author provides evidence that changes in the seniority of US senators on influential committees have a significant impact on firms located in the same state as the new senior senators. These firms decrease innovative efforts due to the political connections, resulting in lower levels of innovation. These findings are robust after controlling the endogeneity issues. In conclusion, this study contributes to the existing literature by offering insight into the relationship between customer concentration and firm innovation. The findings highlight the importance of considering the relationship between firms and their customer base in determining innovation outcomes.

This study demonstrates that a heavy reliance on the US government as a customer channel has a detrimental impact on a firm’s innovation efficiency. Furthermore, the author analyzes the exogenous shock of changes in the seniority of US senators on the relationship between customer dependence and innovation. By utilizing a propensity matched sample, the author addresses endogeneity concerns and provides robust evidence for empirical findings. In conclusion, this study sheds light on the complex relationship between customer dependence and firm innovation, particularly in the context of the US government as a sales channel.

Taking advantage of distinctive text-based measures of climate policy uncertainty and firm-specific exposure to climate change, this study aims to examine the impact of firm-specific vulnerability on dividend policy.

To mitigate endogeneity, the authors apply an instrumental-variable analysis based on climate policy uncertainty as well as use additional analysis using propensity score matching and entropy balancing.

The authors show that an increase in climate policy uncertainty exacerbates firm-specific exposure considerably. Exploiting climate policy uncertainty to generate exogenous variation in firm-specific exposure, the authors demonstrate that companies more susceptible to climate change are significantly less likely to pay dividends and those that do pay dividends pay significantly smaller dividends. For instance, a rise in firm-specific exposure by one standard deviation weakens the propensity to pay dividends by 5.11%. Climate policy uncertainty originates at the national level, beyond the control of individual firms and is thus plausibly exogenous, making endogeneity less likely.

To the best of the authors’ knowledge, this study is the first attempt in the literature to investigate the effect of firm-specific exposure on dividend policy using a rigorous empirical framework that is less vulnerable to endogeneity and is more likely to show a causal influence, rather than a mere correlation.

This study examines the effect of stable institutional investors on firms' product quality failures. Furthermore, the authors investigate the channels through which institutional ownership stability enhances product quality management.

This study uses probit, ordered probit and negative binomial regression frameworks to investigate the research questions. In addition, the authors utilize the three-stage least-squares to address the endogeneity issues.

Using a sample of product recall incidents from 2012 to 2021, the authors find that firms with more stable institutional ownership have a lower probability, frequency and severity of recall incidents and adopt a proactive product recall strategy. Institutional investors with significant and persistent holdings improve quality management by reducing overinvestment and the use of option-linked and relative performance executive compensations. Furthermore, the influence of stable institutional owners on product quality failures is more pronounced in firms with low managerial ability and specialist CEOs. Lastly, the empirical evidence demonstrates that stable holdings by active investors have a more substantial impact on reducing product recalls than passive and other stable institutional holdings.

This study is the first to examine the impact of institutional ownership stability on firms' product recalls. The authors contribute to the literature on the benefits of stable institutional ownership on firm outcomes and the determinants of product quality failures.