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Corporate Sustainability Performance and Firm Value through Investment Efficiency
Faculty of Economics and Administration, King Abdulaziz University, Jeddah 21589, Saudi Arabia.ORCID iD: 0000-0002-2651-3942
Faculty of Economics and Administration, King Abdulaziz University, Jeddah 21589, Saudi Arabia.ORCID iD: 0000-0002-6680-3426
University of Gävle, Faculty of Education and Business Studies, Department of Business and Economic Studies, Business administration.ORCID iD: 0000-0002-2536-0446
2023 (English)In: Sustainability, E-ISSN 2071-1050, Corporate Sustainability Performance and Firm Value through Investment Efficiency, Vol. 15, no 1, article id 305Article in journal (Refereed) Published
Abstract [en]

This study investigates the influence of corporate sustainability performance (CSP) on firm value through investment efficiency. By applying a panel regression analysis using a large sample of 26,838 firm-year observations that represent 9218 Asian listed companies over the period of 2012–2019, we illustrate that high corporate sustainability performance (CSP) increases investment efficiency. This result coincides with both stakeholder theory and information asymmetry theory where economic, environmental, social, and governance involvements play a fundamental role in improving firm value. Our results further show that the social dimension significantly improves investment decisions, unlike dimensions associated with environment and governance, which show no significant effect on investment efficiency. These insights about the impact of CSP on investment decisions will be useful to stakeholders, decision-makers, policymakers, as well as academics to improve their awareness of the importance of corporate sustainability practices. Particularly, the positive relationship between the social dimension of CSP and investment efficiency should motivate managers to improve their corporate social responsibility policy formation and implementation, and the management of investment portfolios in enhancing firm value.

Place, publisher, year, edition, pages
MDPI , 2023. Vol. 15, no 1, article id 305
Keywords [en]
corporate social sustainability performance; investment efficiency; firm value; Asian firms
National Category
Business Administration
Research subject
Sustainable Urban Development
Identifiers
URN: urn:nbn:se:hig:diva-40724DOI: 10.3390/su15010305ISI: 000909278300001Scopus ID: 2-s2.0-85146023980OAI: oai:DiVA.org:hig-40724DiVA, id: diva2:1725571
Available from: 2023-01-11 Created: 2023-01-11 Last updated: 2023-11-23Bibliographically approved

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Homayoun, Saeid

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