Does Financial Development Affect Environmental Degradation? Evidence from the OECD Countries

In this study, building a simple model that incorporates static and dynamic elements, the relationship of financial development and economic growth to environmental degradation is investigated together with the validation of the Environmental Kuznets Curve (EKC) hypothesis. Our analysis is based on an unbalanced panel data set covering the OECD countries over the period 1970–2014. Our approach thoroughly accounts for the presence of cross‐sectional dependence between the sample variables and utilizes second generation panel unit root tests in order to investigate possible cointegration relationships. The empirical findings do indicate that local (NO_x per capita emissions) and global (CO₂ per capita emissions) pollutants redefine the EKC hypothesis when we account for the presence of financial development indicators. Specifically, in the case of global pollution an N‐shape relationship is evident in both static and dynamic frameworks, with a very slow adjustment. Lastly, our study calls for a strengthening of the effectiveness of environmental degradation policies by ensuring sustainability of the OECD banking system in order to drastically reduce emissions. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Coopetition as a Potential Strategy for Corporate Sustainability

The paper is among the first to consider coopetition strategy in the context of corporate level sustainability. Through examination of literature and an example of an actual coopetitive agreement in wine industry logistics, consideration is given to the potential benefits of and problems with sustainability‐based coopetition strategies. The research, based on publicly available information, leads to suggestions for future study into specific theoretical, methodological and pragmatic aspects of sustainability‐related coopetition strategies. At a theoretical level, research into the dynamics of coopetition strategies and relationships between win–win and trade‐offs within economic, environmental and social performance settings is suggested. As the field of study continues to emerge, a broader set of exploratory case studies involving collaborative engagement and participation of practitioners is needed. Attention is also drawn to a broad range of settings available for further research into the design and implementation of sustainability‐related coopetitive strategies exploring advantages for corporations and society. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Does competition prevent industrial pollution? Evidence from a panel threshold model

The objective of this paper is to assess the impact of competition on industrial toxic pollution by using, for the first time, a panel threshold model which allows evaluations of the main drivers of toxic releases under two different market regimes. The empirical analysis is based on a micro‐level panel dataset over the five‐year period 1987–2012. We show that this relationship is statistically significant and robust above and below the threshold, even after accounting for alternative specifications of market concentration. Specifically, we unmask an inverted V‐shaped relationship between market concentration and industrial pollution. We argue that the increasing non‐parametric regression line up to a certain concentration (threshold) level indicates a negative effect on facilities' emissions levels, whereas a decreasing line indicates a positive effect. This relationship provides new insights into environmental policy design towards abatement of industrial releases and sustainability. Finally, our empirical model remains robust under different specifications properly accounted for possible endogeneity.     

Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy

The purpose of this study is to investigate the impact of board sustainability committees on environmental and social performance and to examine the mediating effect of corporate social responsibility (CSR) strategy on the relationship between the presence of board sustainability committees and corporate sustainability performance. Using data of U.K. listed firms for the period of 2009–2016, the study employs panel regression analysis and bootstrapping techniques to test study hypotheses. The results suggest that the presence of a sustainability committee improves the effectiveness of CSR strategies. The results also indicate that firms with effective CSR strategies exhibit better environmental and social performance. Further, the empirical results show that the effectiveness of CSR strategy explains the positive relationship between board sustainability committees and corporate environmental and social performance, thus supporting the theoretical framework of the study. The findings of the study shed new light on this research direction and could be of interest to board members, managers, practitioners, investors, policy makers, and regulators that plan to promote sustainability practices and strategies needed for sustainable development.     

US deficit sustainability: a new approach based on multiple endogenous breaks

Recent empirical work has questioned the consistency of US fiscal policy with an intertemporal budget constraint. Empirical results have tended to indicate that the deficit process has undergone at least one structural shift during recent decades, with the deficit becoming either unsustainable or sustainable in only a weak sense in the post‐shift period. In this paper, we re‐examine sustainability using a new approach, based on a cointegration model with multiple endogenous breaks. A Bayesian methodology is applied, incorporating Markov chain Monte Carlo simulators. In contrast to previous analyses, we find evidence of a sustainable deficit process over the 1947–1992 period, despite the occurrence of breaks during the 1970s and 1980s. Copyright © 2000 John Wiley & Sons, Ltd.     

On the Stability of the Excess Sensitivity of Aggregate Consumption Growth in the USA

This paper investigates whether there is time variation in the excess sensitivity of aggregate consumption growth to anticipated aggregate disposable income growth using quarterly US data over the period 1953–2014. Our empirical framework contains the possibility of stickiness in aggregate consumption growth and takes into account measurement error and time aggregation. Our empirical specification is cast into a Bayesian state‐space model and estimated using Markov chain Monte Carlo (MCMC) methods. We use a Bayesian model selection approach to deal with the non‐regular test for the null hypothesis of no time variation in the excess sensitivity parameter. Anticipated disposable income growth is calculated by incorporating an instrumental variables estimation approach into our MCMC algorithm. Our results suggest that the excess sensitivity parameter in the USA is stable at around 0.23 over the entire sample period. Copyright © 2016 John Wiley & Sons, Ltd.     

Marketing strategies in the age of sustainable development: Evidence from the food industry

In this paper we investigate characteristics and drivers of sustainability marketing strategies. Based on an empirical study in the food industry, we identify four sustainability marketing strategy types with distinctive characteristics (performers, followers, indecisives and passives). Consumers are one of the main drivers of sustainability marketing strategies. Depending on the sensitization of consumers to socio‐ecological problems, the perceptibility of socio‐ecological qualities, the individually perceived net benefits and the availability of sustainable alternatives, we argue that the typology and drivers apply to non‐food industries as well. Furthermore, we find that the incorporation of social and ecological aspects into marketing strategies also depends on the market segment in which the company competes: companies that are positioned in the premium or quality segment are more inclined to take an active stance on sustainability marketing than companies that compete in the price segment. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Determinants of the adoption of sustainability assurance statements: an international investigation

This paper explores the factors associated with voluntary decisions to assure social, environmental and sustainability reports. Since the market for assurance services in this area is in its formative stages, there is a limited understanding of the demand for this emergent non‐financial auditing practice, which is evolving rapidly across different countries. Drawing from extant literature in international auditing and environmental accounting, we focus on a set of country‐level institutional factors to explain the adoption of sustainability assurance statements among an international panel of 212 Fortune Global 250 companies for the years 1999, 2002 and 2005. Consistent with our expectations, our results provide evidence that companies operating in countries that are more stakeholder oriented and have a weaker governance enforcement regime are more likely to adopt a sustainability assurance statement. Further, the demand for assurance is higher in countries where sustainable corporate practices are better enabled by market and institutional mechanisms. Our exploratory findings also indicate that the likelihood of choosing a large accounting firm as assurance provider increases for companies domiciled in countries that are shareholder oriented and have a lower level of litigation. We conclude the paper by suggesting three directions of research in the area of sustainability assurance that have relevant academic and practical implications. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Crowdfunding as a tool to support sustainability‐oriented initiatives: Preliminary insights into the role of product/service attributes

A common goal of current research seems to uncover whether crowdfunding (CF) could be considered an effective way to support sustainability‐oriented initiatives in securing funding, due to diverging results emerging from literature. We claim that the objective of proving whether CF may benefit sustainability‐oriented initiatives could be misplaced; rather, we deem more fruitful to understand how critical are some attributes of products/services pursued within CF campaigns to benefiting sustainability‐oriented initiatives and increasing their odds of success in CF. We focus on food‐related projects as in this sector, sustainability issues apply more than to any other human activities and construct a unique sample of food CF campaigns launched and ended in the European Economic Area countries on the world's most popular reward‐based CF platform, that is, Kickstarter. We identify campaigns with a sustainability orientation and perform an in‐depth qualitative analysis, which allows us to classify them into meaningful clusters and subclusters. Our research suggests that the emphasis on egoistic/self‐centered product attributes, rather than on altruistic/society‐centered attributes, is generally more crucial to facilitate CF support to sustainability‐oriented projects. However, the emphasis on altruistic/society‐centered attributes emerges to be more beneficial for initiatives specifically supporting local products. Our results also suggest that reward‐based CF is not suitable for sustainability‐oriented projects targeting disadvantaged individuals/groups. These results offer both theoretical and empirical contributions to the literature as well as practical implications.     

Relating Environmental,Social, and Governance scores and sustainability performances of firms: An empirical analysis

Environmental, Social, and Governance (ESG) scores can act as an indicator for sustainability performance of organizations. This paper explores an empirical evidence for the relationship binding ESG scores and sustainability performances of firms. We observe and evaluate the ESG performance scores of 1,820 firms globally for 5 years, from 2014 to 2018 on 10 major themes and over 400 different indicators, as listed by Thomson Reuters and is captured from the Bloomberg terminal data. We posit five hypotheses to check the relations binding ESG scores and the total sustainability performances of firms. A Partial Least Square (PLS) analysis and standard bootstrapping using Smart PLS 3.0 software is used to observe the results and to evidence the direct and moderating effects among latent variables contributing to sustainability performances. We observe a significant and negative moderating effect of ESG performances, independently over the all direct relations, considering their relationship to ESG performances. One of the major implications of this research is in the direction of assigning priorities while considering environmental‐, social‐, and governance‐related themes in the implementation of any strategies or policies into practice.     

Sustainability Management within Supply Chains – A Resource Dependence View

Proceeding from three basic concepts of resource dependence theory – organizational effectiveness, interdependence and external control – we conducted a multiple‐case study to investigate factors that facilitate and hinder sustainability management within supply chains. Our empirical observations highlight that focal firms do not necessarily transfer their own corporate sustainability agendas into control mechanisms for managing the sustainability of their suppliers. Based on this insight, we develop a new theory that explains how intra‐ and interorganizational sustainability management is affected by a firm's business case for promoting sustainability, control mechanisms, trade‐offs, trust and market liberalization. The theory offers new insights into drivers and barriers for effective interorganizational sustainability management, whereas previous theories could not fully explain the reasons for diverging sustainability management practices in supply chains. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

The Impact of Business Strategies on Online Sustainability Disclosures

With increasing attention being paid to corporate sustainability, pressure from stakeholders, especially customers, is forcing companies to implement sustainability strategies and practices that express their commitment to sustainable development, and engage with stakeholders through voluntary sustainability disclosure. To better understand the sustainability disclosure mechanisms from a business strategy perspective, this study investigates the influence of business strategy, formulated by customer groups, on online sustainability disclosure. It provides empirical observation of Malaysian public‐listed companies based on the combined lens of stakeholder and legitimacy theory. Despite the comparatively low level of corporate sustainability disclosure in Malaysia, this content analysis of online sustainability information disclosure reveals that the companies with more diversified product lines disclose more sustainability information, and that the corporate sustainability effort is significantly related to brand name. Hence, companies should be encouraged to proactively improve their sustainability performance and disclose more sustainability information in order to strengthen their brand names. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

The Effect of Country‐Level Investor Protection on the Voluntary Assurance of Sustainability Reports

Over the last several years, sustainable (or socially responsible) investing has experienced rapid growth around the world reflecting an increasing awareness by investors of social, environmental, ethical, and corporate governance issues. This heightened awareness among investors has resulted in a demand for sustainability reporting and a corresponding increase in demand for assurance of sustainability information to enhance its credibility. Using an investor‐based view, we examine the impact of country‐level investor protection on reporting companies’ voluntary sustainability assurance decisions. We find that both the decision to obtain voluntary sustainability report assurance and the decision to obtain higher quality assurance are more likely for firms domiciled in countries that have weaker investor protection. Our results indicate that managers in low investor protection countries use voluntary sustainability assurance as a substitute monitoring mechanism.     

Union status of young men in Britain: a decade of change

Previous empirical studies of individual union status in Britain have been cross‐sectional. In contrast, we use longitudinal data from the National Child Development Study, to estimate the determinants of male trade union membership over the period 1981–1991. As suggested by union theories, we find that it is important to control for unobserved individual heterogeneity, and our preferred model allows for correlation of individual heterogeneity with observable variables. Our estimates reveal that the observed decline in very large workplaces, and the contraction of the public sector, explain about one third of the predicted decline in union membership over the period. Copyright © 2000 John Wiley & Sons, Ltd.     

Dynamics of the federal funds target rate: a nonstationary discrete choice approach

We apply a discrete choice approach to model the empirical behaviour of the Federal Reserve in changing the federal funds target rate, the benchmark of short‐term market interest rates in the US. Our methods allow the explanatory variables to be nonstationary as well as stationary. This feature is particularly useful in the present application as many economic fundamentals that are monitored by the Fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time. The chosen model successfully predicts the majority of the target rate changes during the time period considered (1994–2001) and helps to explain strings of similar intervention decisions by the Fed. Based on the model‐implied optimal interest rate, our findings suggest that there is a lag in the Fed's reaction to economic shocks during this period. Copyright © 2004 John Wiley & Sons, Ltd.     

Labour Demand,Flexible Contracts and Financial Factors: Firm‐Level Evidence from Spain*

We estimate models of labour demand for a panel of 3,400 Spanish manufacturing firms over the period 1985–2001. We examine the roles of fixed‐term contracts, financial factors and a policy reform in 1997 affecting permanent contracts by lowering payroll taxes and dismissal costs. Compared with permanent employment, the demand for flexible labour displays: (i) greater sensitivity to financial factors; (ii) greater cyclical sensitivity; (iii) a larger average wage elasticity; and (iv) less inertia. Our analysis of the 1997 policy reform suggests that a 5 percentage point reduction in the payroll tax is associated with an 8% increase in permanent labour demand.     

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Do stable strategic time periods exist? Towards new methodological and theoretical insights

This paper investigates a fundamental issue in the current research on strategic groups: the existence or non‐existence of the so‐called ‘stable strategic time periods’ (SSTPs). Our study provides new evidence by adding new methodological and theoretical insights. The research setting is the Spanish banking industry over a 15‐year period, 1983–1997. Unlike all prior longitudinal research that found SSTPs, the multi‐method procedure that we used in this study (i.e. equality of variance and covariance matrix and mean vector of strategic variables and a subsequent grouping analysis performed through the MCLUST) has led us to reject the existence of SSTPs in the industry under study. Based on these original findings, we conclude by suggesting a proposition which should be corroborated in future empirical studies on strategic groups. Copyright © 2007 John Wiley & Sons, Ltd.     

Further examination of the velocity-money growth variability debate: Evidence from Japan using an error-correction model

The claim that volatility of money leads people to increase their demand for money is tested using recently developed cointegration techniques and error-correction modeling. This approach offers an alternative to the standard Granger-causality test for establishing the long-run relation of velocity and money growth variability. In this paper, we employ these procedures on quarterly data from Japan over the 1973:1–1992:1 flexible exchange rate period. Our findings are supportive of the Friedman hypothesis for both the short and long runs. These results are important empirical additions to the new classical theory of economics which suggests that unanticipated movements in the money supply are non-neutral.     

Competition in Regulated Markets with Sluggish Beliefs about Quality

We investigate the effect of competition on quality in regulated markets (e.g., health care, higher education, public utilities), using a Hotelling framework, in the presence of sluggish beliefs about quality. We take a differential‐game approach, and derive the open‐loop solution (providers choose the optimal quality investment plan based on demand at the initial period) and the feedback closed‐loop solution (providers observe demand in each period and choose quality in response to current demand). If variable costs are strictly convex, and the degree of cost complementarity between quality and output is not too strong, the steady‐state quality is higher under the open‐loop solution than under the feedback solution. In both solutions, quality and demand move in opposite directions over time on the equilibrium path to the steady‐state. While lower transportation costs or less sluggish beliefs lead to higher quality in both solutions, the quality response is weaker when players use feedback strategies.