The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 3 August 2020
Issue publication date: 16 October 2020
Abstract
Purpose
In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social.
Design/methodology/approach
This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated.
Findings
The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern.
Originality/value
To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.
Keywords
Acknowledgements
This work is supported by national funds, through the FCT – Portuguese Foundation for Science and Technology under the project UIDB/04011/2020 and within the project UIDB/03182/2020.
Citation
Cancela, B.L., Neves, M.E.D., Rodrigues, L.L. and Gomes Dias, A.C. (2020), "The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment", International Journal of Accounting & Information Management, Vol. 28 No. 4, pp. 785-806. https://doi.org/10.1108/IJAIM-05-2020-0068
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited