The effects of sustainable development on firms' financial performance - an empirical approach

Dong Shang Chang, Li Chin Regina Kuo

Research output: Contribution to journalArticlepeer-review

72 Scopus citations

Abstract

10.1002/sd.351.abs This research studies firms' sustainable development in term of economic, environmental and social dimensions and their financial performance, which includes a broader coverage of stakeholder engagement of both sustainability and profitability in a structural equation model (SEM). The secondary data of 311 firms' sustainability scores are analyzed and our observations reveal that (1) the better sustainability performers may have a tendency of positive influence on firm profitability in the same and later periods, (2) a positive reciprocal causality may exist between sustainability and profitability among the better sustainability group, (3) profitability affects corporate sustainability positively in both higher and lower sustainability groups and (4) sustainability influences firm profitability negatively in the lower sustainability group.

Original languageEnglish
Pages (from-to)365-380
Number of pages16
JournalSustainable Development
Volume16
Issue number6
DOIs
StatePublished - Nov 2008

Keywords

  • Financial
  • Performance
  • Stakeholder engagement
  • Structural model
  • Sustainable development

Fingerprint

Dive into the research topics of 'The effects of sustainable development on firms' financial performance - an empirical approach'. Together they form a unique fingerprint.

Cite this