Search results

This paper examines the association between the quality of management schools and sustainability and investigates whether ethical behavior of firms moderates relationship between the quality of management schools and sustainability.

The sample consists of 500 country-year observations over the period of 2014-2017. Sustainability is collected from the Global Sustainable Competiveness Index reports for 2014, 2015, 2016 and 2017, while the quality of management schools and ethical behavior of firms are collected from the Global Competiveness Report for the same years.

The findings of this study suggest that the quality of management schools is positively associated with sustainability. When testing for the moderating effect of ethical behavior of firms on the association between quality of management schools and sustainability, results show that the positive association becomes positive and more significant for countries where firms operate with high ethical behaviors, while the association becomes insignificant for settings where firms operate with low ethical behaviors. Findings also show that the quality of management schools and ethical behavior of firms play a complimentary role in improving sustainability.

The findings emphasize the role played by business schools and business ethics in improving sustainability. These results may have policy implications for governments aiming to improve sustainability by emphasizing on education for sustainable development in management schools’ 2019 programs enforcing standards dealing with business ethics and controlling firms’ 2019 compliance with them.

The findings of this study highlight the importance of education, as proxied by the quality of management schools, in the development of sustainable societies and economic systems. To the best of the author's knowledge, this is the first study that tries to empirically link business schools programs to sustainability efforts and how business ethics may affect this association.

The purpose of this paper is to examine the relationship between country-level governance and ethical behaviour of firms in African countries in the period 2009-2012.

It uses a broad set of country-level governance ratings by the World Bank and data on ethical behaviour of firms by the World Economic Forum’s report on Global Competitiveness. Full data of a total of 39 African economies out of the 54 (including two disputed) economies over the sample period were obtained for this analysis.

The authors find a statistically significant and positive relationship between country-level rule of law, regulatory quality, control of corruption and democracy, and firm ethical behaviour of firms in African economies. This implies that improvement in country-level rule of law, regulatory quality, control of corruption and democracy tends to be associated with sound ethical behaviour of firms in African economies. However, the authors did not find any statistically significant relationship between country-level accountability, political stability, outsider model of governance and ethical behaviour of firms.

As a continent that is yet to fully discover its potential, the practice of good governance is particularly germane, as this may not only help ensure sound ethical standards of corporations, but may also aid the continent to attract foreign investors, which will beneficially impact economic growth and development of African economies. In this respect, efforts by governments across the continent to ensuring good governance are laudable. One possible way is to ensure an effective and transparent enforcement of laws to stimulate compliance in a specifically clear-cut manner by crafting costs for non-compliance (for instance, legal costs, investigation cost, imprisonment, dent to image and fines).

This paper reinforces the belief that the existence of country-level good governance could provide and enhance cohesive and internally consistent ethical standards of companies.

The purpose of this paper is to examine the impact of a corporate ethical policy, such as a code of ethics, on the unethical behavior of internal and vendor employees in the supply chain in India. It also aims to find whether International Standards Organization (ISO) certification of vendors affects the result and any significant relationship between management commitment and unethical behavior can be supported by the findings as well.

Empirical analyses were conducted on a survey consisting of 43 questions comprising 181 valid responses. Multiple regression analysis that includes four independent variables – code of ethics, management commitment, supply chain principles and personal values taking unethical behavior as dependent variable – was used to find the significance of the relationship.

The implementation of a code of ethics, management commitment, supply chain principles and personal values all have a negative association with unethical behavior. Personal values, measuring a firm’s financial aspects for non-compliance to ethical behavior, have a positive association with unethical behavior. The relationships of top management commitment, personal values with internal employees’ unethical behavior are significant. The significant relationship between management commitment and unethical behavior can be supported by the findings as well. It was also found that ISO certificates and firm size as the control variables did not have any effect on the relationship between the independent variables and unethical behavior. The analysis also shows that ISO 26000 certificate, the international standard for socially responsible operations, does not impact this relationship.

Measuring substantial managerial effort for corporate social responsibility (CSR) practices by asking questions like, “how committed employees think top management is to social responsibility,” may not fully measure substantial managerial effort for CSR practices. To improve the results of the current study, future research can use the CSR index or disclosure as a measure to better reflect management commitment and practice for social responsibility. Second, the current study is limited to measuring how many occurrences of unethical behavior are witnessed by employees instead of what specific unethical behavior is more often witnessed. Considering India has the second largest population in the world, 181 responses may not represent the true practices in the business environment in India for generalization.

The findings suggest that management should put more of an emphasis on improving the commitment of upper-level managers to decrease the overall unethical practices of their employees. The study finds that employees’ personal values influence their ethical behavior. Therefore, communications and training of employees at all levels should emphasis on improving personal values.

Businesses should influence academics to incorporate personal value building in course curricula. The Indian CSR law should incorporate the holistic view of CSR taking care of needs of all stakeholders under the provision of the regulation. In 2015, India became the first country in the world to legislate CSR practices in corporations but it misses the opportunity to sensitize the management and employees on ethical practices as it mainly identified philanthropic expenses as mandatory CSR spending and silent on ethical business practices.

The present study contributes to the literature by bringing supply chain context to the effect of different factors on unethical behaviors and interaction of internal and vendor firms in terms of ethical practices. There are several studies on business ethics in different countries including China, but in the case of India similar studies are not much. The present study fills the gap.

Ethical corporate citizenship and good corporate governance have received increased attention since the financial scandals prevalent at the beginning of the new millennium. This study first explores the relationship of ethical corporate citizenship to financial performance (i.e., greater profitability and efficiency, and lower cost of capital). Second, the study examines whether ethical corporate behavior is associated with a market-value premium. Results of prior studies are mixed. The results of our study contribute directly to the recent accounting literature in which specific aspects of ethical corporate behavior have been explored (Fukami et al. 1997; Ittner and Larker, 1998; Ballou et al., 2003; Clarkson et al., 2004). We use firms listed by Business Ethics as “The 100 Best Corporate Citizens” as our sample of ethical firms. The univariate results of our study indicate a significant relationship between ethical corporate behavior and financial performance (i.e., greater profitability and efficiency, and lower cost of capital). The results of multivariate tests, controlling for prior year market value of equity, yield results that indicate a marginally significant association between being recognized as ethical in that year and market value of equity, but no association between being recognized as ethical at least one time and market value of equity. Nevertheless, given our study's findings of better financial performance and lower risk, we conclude that ethical corporate citizenship does indeed benefit a firm.

This paper aims to examine the effect of the corporate ethical approach on the cost of equity capital. This study is conducted on a large international sample on behalf of the world’s most engaged firms from an ethical point of view in 2015.

The multivariate linear regression model is used to meet the purpose of this study and research hypotheses are also examined using a sample of 80 of most ethical firms in the world during the year 2015. Moreover, three variables (i.e. business ethics, corporate social responsibility and executive compensation based on the achievement of sustainable development goals) are used to reflect the corporate ethical approach and the implied cost of equity capital is used for estimating the cost of equity. In this regard, equity cost estimation is the most appropriate approach to test the effect of business ethics on the cost of financing firms.

Based on a sample of 80 firms emerging as the world’s most ethical firms in 2015, the results revealed that firms with better ethics scores are significantly associated with a reduced cost of equity capital. This paper also demonstrates that the executive incentive pays that are based on the objectives of sustainable development are able to explain different outcomes regarding the relation between corporate ethical behaviors and the cost of equity. These findings support arguments in the literature that firms with socially responsible practices have a higher valuation and lower risk.

This study provides implications for global regulators and policymakers when setting social reporting standards, suggesting that corporate ethical engagement reduces the cost of equity capital by decreasing the information asymmetry and thereby reducing the firms’ risk. Therefore, the findings may be informative to international managers and investors when considering the effect of business ethics on the firm’s ex-ante cost of equity. In this perspective, the voluntary disclosure of information makes it possible to mitigate the problems of asymmetry of information and conflict of interest between the firm and its main providers of capital, which could reduce the cost of equity.

This paper aims to investigate the relationship between digitalization and money laundering and tests whether ethical behaviour of firms and corruption moderate this association.

The sample includes 114 countries during 2016. Basel Anti-Money Laundering Report for 2016 is used to collect data concerning money laundering. Digitalization proxies are collected from digital adoption index from the World Bank for 2016. Finally, the remaining variables are gathered from the Global Competitiveness Report for the same year.

Results show negative and significant associations between the overall digitalization score and sub-scores dealing with digitalization adoption by businesses, people and government and money laundering. When testing for the moderating effect of corruption, the negative and significant association remains stable for both low and high corrupt environments for the overall digitalization score and sub-scores dealing digitalization adoption by businesses and people and money laundering. Similarly, ethical behaviour of firms does not moderate the association between digitalization (overall index and digitalization by business and people) and money laundering, as the relationship remains negative and significant for low and high ethical behaviour sub-samples. By contrast, the association becomes insignificant between digitalization adoption by government and money laundering for countries characterized by high corruption and low ethical behaviour of firms, while it is negative and significant for countries characterized by low corruption and high ethical behaviour firms.

These findings confirm that digitalization effort represents a crucial arm to combat money laundering. It also emphasizes the interrelation that may exist between digitalization effort in governmental institutions and institutional environment, as low levels of money laundering cannot be reached if the digitalization effort undertaken by governments is not supported by low corruption and ethical business environment.

This study aims to establish the link between business ethics and brand loyalty and to investigate the mediating role of corporate social responsibility (CSR) and United Nations Sustainable Development Goals (SDGs) such as green marketing.

Using the purposive sampling technique, data were obtained from 622 middle-income city dwellers who shop at leading retail malls. Data were analyzed with partial least square–structural equation model.

The study found a positive and significant relationship between business ethics, CSR, green marketing and business loyalty. Both CSR and green marketing mediate between perceived firm ethicality and brand loyalty.

This research was done based on general knowledge of business ethics, CSR and green marketing from the consumers’ perspective. Future studies can avoid this limitation.

By ensuring ethical codes, CSR and green marketing, firms can contribute to promoting the SDGs, and at the same time, achieving customer loyalty. Brand loyalty is further enhanced if customers see a firm to be practicing CSR.

The SDGs of sustainable production patterns, climate change and its impacts, and sustainably using water resources must become the focus of companies as they ultimately yield loyalty. Policymakers and society can design a policy to facilitate adoption of better ethical behavior and green marketing by firms as a way of promoting SDGs.

To the best of the authors’ knowledge, this study is the first to test the mediation effect of green marketing and CSR on how ethical behavior leads to brand loyalty. It is also one of the few papers to examine how SDGs can be promoted by businesses as stakeholders.

This study aims to examine the value relevance of ethics information.

This study adopts event study methodology to test the market’s reaction around the announcements of World’s Most Ethical Companies (WME), a ranking based on firms’ overall corporate social responsibility performance. The authors calculate the abnormal returns of firms on the WME lists to investigate how stockholders respond to the disclosure of ethical information.

The authors find significant and positive abnormal returns around the announcements of the lists of ethical firms. Specifically, positive market reaction on the first day after the WME announcement (Day 1) is observed.

This study contributes to the existing literature of the relationship between business ethics and firm value. The authors provide evidence that ethics can be aligned with firms’ financial goals. Further, this study is the first to use the WME announcement as a proxy for ethical firms.

This paper aims to examine the association between the strength of auditing and reporting standards (SARS, hereafter) and sustainability and investigates whether ethical behavior of firms moderates relationship between SARS and sustainability.

The sample consists of 500 country-year observations over the period of 2014–2017. Sustainability is collected from the Global Sustainable Competitiveness Index Reports for 2014, 2015, 2016 and 2017, while SARS and ethical behaviors are collected from the Global Competitiveness Reports for the same years.

The findings of this study suggest that the SARS is associated with sustainability. Similarly, ethical behavior of firms has a positive and significant effect on sustainability. When testing for the moderating effect of ethical behavior of firms on the association between SARS and sustainability, the results show that the positive association SARS becomes positive and more significant for countries where firms operate with high ethical behaviors, while the association becomes insignificant for settings where firms operate with low ethical behaviors.

The findings emphasize the role played by SARS and business ethics in improving sustainability. These results may have policy implications for governments aiming to improve sustainability by strengthening auditing and reporting standards and enforcing laws obliging firms to act ethically.