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Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?

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  • Brulhart, Franck
  • Gherra, Sandrine
  • Quelin, Bertrand V.

Abstract

The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products, industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability.

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  • Brulhart, Franck & Gherra, Sandrine & Quelin, Bertrand V., 2017. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," HEC Research Papers Series 1241, HEC Paris.
    • Handle: RePEc:ebg:heccah:1241
    DOI: 10.2139/ssrn.3078850
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    More about this item

    Keywords

    environmental proactivity; firm profitability; resource-based theory; stakeholder theory; stakeholder orientation;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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