IDEAS home Printed from https://ideas.repec.org/a/bla/corgov/v15y2007i2p345-358.html
   My bibliography  Save this article

Is Corporate Sustainability a Value‐Increasing Strategy for Business?

Author

Listed:
  • Shih‐Fang Lo
  • Her‐Jiun Sheu

Abstract

A new movement reconciling corporate sustainability and investment is gaining world‐wide attention. Whether corporate sustainability has an impact on market value is examined using large US non‐financial firms from 1999 to 2002 in this paper. Taking Tobin’s q as the proxy for firm value, a significantly positive relation between corporate sustainability and its market value is found. We also find a strong interaction effect between corporate sustainability and sales growth on firm value. Moreover, there is evidence to support that being sustainable causes a firm to increase its value. This indicates that companies with remarkable sustainable development strategies are more likely to be rewarded by investors with a higher valuation in the financial markets.

Suggested Citation

  • Shih‐Fang Lo & Her‐Jiun Sheu, 2007. "Is Corporate Sustainability a Value‐Increasing Strategy for Business?," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 345-358, March.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:2:p:345-358
    DOI: 10.1111/j.1467-8683.2007.00565.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-8683.2007.00565.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-8683.2007.00565.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kaptein, Muel & Wempe, Johan, 2002. "The Balanced Company: A Theory of Corporate Integrity," OUP Catalogue, Oxford University Press, number 9780199255511, Decembrie.
    Full references (including those not matched with items on IDEAS)

    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. Muel Kaptein, 2023. "A Paradox of Ethics: Why People in Good Organizations do Bad Things," Journal of Business Ethics, Springer, vol. 184(1), pages 297-316, April.
    2. Lei Wang & Heikki Juslin, 2011. "The effects of value on the perception of corporate social responsibility implementation: A study of Chinese youth," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(4), pages 246-262, July.
    3. Raymond O. S. Zaal, 2011. "Reinforcing Ethical Behavior through Organizational Architecture: A Hypothesized Relationship," Chapters, in: Killian J. McCarthy & Maya Fiolet & Wilfred Dolfsma (ed.), The Nature of the New Firm, chapter 2, Edward Elgar Publishing.
    4. Tiffany Cheng-Han Leung & Robin Stanley Snell, 2021. "Strategies for Social and Environmental Disclosure: The Case of Multinational Gambling Companies," Journal of Business Ethics, Springer, vol. 168(3), pages 447-467, January.
    5. Eyun-Jung Ki & Soo-Yeon Kim, 2010. "Ethics Statements of Public Relations Firms: What Do They Say?," Journal of Business Ethics, Springer, vol. 91(2), pages 223-236, January.
    6. repec:eme:srjpps:v:6:y:2010:i:2:p:472-489 is not listed on IDEAS
    7. Calderón Reyes & Ferrero Ignacio & Redin Dulce M., 2013. "Ethical codes and corporate responsibility of the most admired companies of the world: Toward a third generation ethics?," Business and Politics, De Gruyter, vol. 14(4), pages 1-24, January.
    8. Ingo Winkler, 2011. "The Representation of Social Actors in Corporate Codes of Ethics. How Code Language Positions Internal Actors," Journal of Business Ethics, Springer, vol. 101(4), pages 653-665, July.
    9. Harrison McCraw & Kathy Moffeit & John O’Malley, 2009. "An Analysis of the Ethical Codes of Corporations and Business Schools," Journal of Business Ethics, Springer, vol. 87(1), pages 1-13, June.
    10. Vitolla, Filippo & Raimo, Nicola & Rubino, Michele & Garegnani, Giovanni Maria, 2021. "Do cultural differences impact ethical issues? Exploring the relationship between national culture and quality of code of ethics," Journal of International Management, Elsevier, vol. 27(1).
    11. Johan Wempe, 2009. "Industry and Chain Responsibilities and Integrative Social Contracts Theory," Journal of Business Ethics, Springer, vol. 88(4), pages 751-764, October.
    12. Durif, Fabien & Geay, Bénédicte & Graf, Raoul, 2013. "Do key account managers focus too much on commercial performance? A cognitive mapping application," Journal of Business Research, Elsevier, vol. 66(9), pages 1559-1567.
    13. Florian Scheiber, 2015. "Dressing up for Diffusion: Codes of Conduct in the German Textile and Apparel Industry, 1997–2010," Journal of Business Ethics, Springer, vol. 126(4), pages 559-580, February.
    14. Fanny Bastian & Nicolas Poussing, 2023. "Analyzing the employee/employer relationships in the corporate social responsibility context: An empirical investigation of SMEs," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 2011-2020, July.
    15. Simone Zolingen & Hakan Honders, 2010. "Metaphors and the Application of a Corporate Code of Ethics," Journal of Business Ethics, Springer, vol. 92(3), pages 385-400, March.
    16. Krista Bondy & Dirk Matten & Jeremy Moon, 2008. "Multinational Corporation Codes of Conduct: Governance Tools for Corporate Social Responsibility?," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(4), pages 294-311, July.
    17. Johan Graafland & Andre Nijhof, 2007. "Transparency, market operation and trust in the Dutch construction industry: an exploratory study," Construction Management and Economics, Taylor & Francis Journals, vol. 25(2), pages 195-205.
    18. Beatriz Garcia-Ortega & Javier Galan-Cubillo & Blanca de-Miguel-Molina, 2022. "CSR and CEO’s Moral Reasoning in the Automotive Industry in the Era of COVID-19," SAGE Open, , vol. 12(2), pages 21582440221, May.
    19. Brunella Arru, 2020. "An integrative model for understanding the sustainable entrepreneurs’ behavioural intentions: an empirical study of the Italian context," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3519-3576, April.
    20. Leona Aimée Henry & Tine Buyl & Rob J.G. Jansen, 2019. "Leading corporate sustainability: The role of top management team composition for triple bottom line performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 173-184, January.
    21. Lauren Kleynjans & Marek Hudon, 2016. "A Study of Codes of Ethics for Mexican Microfinance Institutions," Journal of Business Ethics, Springer, vol. 134(3), pages 397-412, March.

    More about this item

    Statistics

    Access and download statistics

    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:bla:corgov:v:15:y:2007:i:2:p:345-358. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0964-8410&site=1 .

    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.