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Deciphering Corporate Governance and Environmental Commitments among Southeast Asian Transnationals: Uptake of Sustainability Certification

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  • Jean-Marc Roda

    (CESSMA - Centre d'Etudes en Sciences Sociales sur les Mondes Africains, Américains et Asiatiques - IRD - Institut de Recherche pour le Développement - IRD [France-Nord] - Institut de Recherche pour le Développement, INTROP - Institute of Tropical Forestry & Forest Products - Universiti Putra Malaysia, FRIM - Forest Research Institute of Malaysia - FRIM, UPR BioWooEB - BioWooEB - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UM - Université de Montpellier)

  • Norfaryanti Kamaruddin

    (INTROP - Institute of Tropical Forestry & Forest Products - Universiti Putra Malaysia)

  • Rafael Palhiarim Tobias

Abstract

Promoting tropical forest sustainability among corporate players is a major challenge. Many tools have been developed, but without much success. Southeast Asia has become a laboratory of globalization processes, where the development and success of agribusiness transnationals raises questions about their commitment to environmental concerns. An abundance of literature discusses what determines the behavior of Asian corporations, with a particular emphasis on cultural factors. Our hypothesis is that financial factors, such as ownership structure, may also have a fundamental role. We analyzed the audited accounts of four major Asian agribusiness transnationals. Using network analysis, we deciphered how the 931 companies relate to each other and determine the behavior of the transnationals to which they belong. We compared various metrics with the environmental commitment of these transnationals. We found that ownership structures reflect differences in flexibility, control and transaction costs, but not in ethnicities. Capital and its control, ownership structure, and flexibility explain 97% of the environmental behavior. It means that existing market-based tools to promote environmental sustainability do not engage transnationals at the scale where most of their behavior is determined. For OPEN ACCESS Forests 2015, 6 1455 the first time, the inner mechanisms of corporate governance are unraveled in agricultural and forest sustainability. New implications such as the convergence of environmental sustainability with family business sustainability emerged.

Suggested Citation

  • Jean-Marc Roda & Norfaryanti Kamaruddin & Rafael Palhiarim Tobias, 2015. "Deciphering Corporate Governance and Environmental Commitments among Southeast Asian Transnationals: Uptake of Sustainability Certification," Post-Print cirad-01164222, HAL.
  • Handle: RePEc:hal:journl:cirad-01164222
    DOI: 10.3390/f6051454
    Note: View the original document on HAL open archive server: https://hal.science/cirad-01164222
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    Cited by:

    1. Anseeuw, Ward & Roda, Jean-Marc & Ducastel, Antoine & Kamaruddin, Norfaryanti, 2016. "Stratégies globales des firmes et financiarisation de l’agriculture," Selected Book Chapters, in: Estelle Biénabe & Denis Loeillet & Alain Rival (ed.), Développement durable et filières tropicales. Estelle Biénabe, Denis Loeillet, Alian Rival (eds). (2016). Quae, Versailles, France. 336 pp. ISBN 97827, edition 1, volume 1, chapter 24, pages 265-279, CIRAD, Forest department, UPR40.
    2. Rawshan Ara Begum & Asif Raihan & Mohd Nizam Mohd Said, 2020. "Dynamic Impacts of Economic Growth and Forested Area on Carbon Dioxide Emissions in Malaysia," Sustainability, MDPI, vol. 12(22), pages 1-15, November.

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    More about this item

    Keywords

    Southeast Asia; oil palm; forest; transnationals; investment strategy; emerging markets; competitiveness; network analysis; network metrics; ethnic business; ownership structure;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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