IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v19y2026i6p445-d1971178.html

Eco- and Socio-Efficiency as Determinants of Default Risk: Evidence from European Firms

Author

Listed:
  • Bochra Issa

    (Department of Economics, Faculty of Economics and Management, University of Sfax, Sfax 3018, Tunisia)

  • Sana Ben Abdallah

    (Department of Economics, Faculty of Economics and Management, University of Sfax, Sfax 3018, Tunisia)

  • Foued Badr Gabsi

    (Department of Economics, Faculty of Economics and Management, University of Sfax, Sfax 3018, Tunisia)

Abstract

This study investigates how eco-efficiency and socio-efficiency influence firms’ default risk across the European financial, industrial, and consumer service sectors from 2010 to 2024. This study aims to determine whether integrating environmental and social performance into corporate strategies mitigates financial distress over time. The Pooled Mean Group ARDL estimator was employed to capture the short- and long-term dynamics. The results indicate that higher eco- and socio-efficiency significantly reduce long-term default risk, particularly in the financial and industrial sectors. Short-term effects were found to be insignificant, suggesting that sustainability benefits gradually emerged. This study offers novel sector-specific evidence linking sustainability efficiency to default risk in European firms and provides insights into how environmental and social efficiencies enhance corporate resilience and financial stability.

Suggested Citation

  • Bochra Issa & Sana Ben Abdallah & Foued Badr Gabsi, 2026. "Eco- and Socio-Efficiency as Determinants of Default Risk: Evidence from European Firms," JRFM, MDPI, vol. 19(6), pages 1-28, June.
    • Handle: RePEc:gam:jjrfmx:v:19:y:2026:i:6:p:445-:d:1971178
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/19/6/445/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/19/6/445/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    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:gam:jjrfmx:v:19:y:2026:i:6:p:445-:d:1971178. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    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.