By analysing approximately 800 companies’ data from 21 European countries, this research uncovered the nexus between institutional quality (IQ) and corporate sustainable performance (CSP). The findings show that IQ plays a positive and significant role in safeguarding CSP, and large firms play an essential preamble in this regard. To come to a conclusion, this research has applied random effect and two steps system GMM econometric models, and the findings are consistent and empirically robust; hence, it disseminates key messages to policymakers and practitioners about the role of IQ on CSP.