Environmental sustainability orientation and performance of family and nonfamily firms

Abstract

Despite the growing research evidence on the effect of environmental sustainability orientation (ESO) on firm outcomes, contingent factors that may influence the strength of this relationship have received little scholarly attention. In this study, we use insights from the literature on ESO and family business to introduce family status and firm age as moderators in the ESO-performance linkage. Using timelagged data from 253 small and medium-sized enterprises in Ghana, we found the impact of ESO on firm performance is amplified for nonfamily firms but not significant for family firms. Our evidence suggests it is stronger among older firms than younger ones. Implications and directions for future research are discussed.

The effects of environmental, social and governance disclosure on the cost of capital in small and medium enterprises: The role of family business status

“…On the other hand, for family SMEs, the increase in WACC due to the environmental disclosure is capsized to the extent that they benefit from a reduction in the cost of capital in the same way that large companies do. In contrast with some previous studies, where environmental engagement by family firms may not exhibit a potential effect (Adomako, Amankwah‐Amoah, Danso, Konadu, & Owusu‐Agyei, 2019) or may even result in a lower performance (Dal Maso, Basco, Bassetti, & Lattanzi, 2020), our findings suggest that higher environmental disclosure in family SMEs will reduce the price paid to financiers. This pattern aligns with the view that family firms are more sensitive to environmental strategies (Campopiano & De Massis, 2015), which in turn reduces the probability of being perceived as irresponsible corporate citizens, and avoid potential, devastating, public scandals (Dyer & Whetten, 2006).…”

Proactive environmental strategy and firm performance at the bottom of the pyramid

“…In doing so, this paper makes important contributions to the literature. First, the papers extend the sustainability literature (Adomako et al, 2019; Delmas & Pekovic, 2018; Rennings & Zwick, 2002; Roxas, Ashill, & Chadee, 2017) by showing the impact of PES on firm performance more pronounced in firms that do not embark use the bottom of the pyramid (BOP) orientation. The BOP market represents the biggest market for firms in developing countries (Kantar Research Report, 2015; Prahalad & Hammond, 2002), and this market segment remains underserved.…”

“…For example, several efforts have been directed to explaining the influence of firm environmental strategy on their performance (Danso, Adomako, Amankwah‐Amoah, Owusu‐Agyei, & Konadu, 2019; Roxas, Ashill, & Chadee, 2017; Stefan & Paul, 2008). The concensus is that firms that embark on proactive environmental practices perform better than their counterparts that do not integrate environmental solutions into their overall business strategy (Adomako, Amankwah‐Amoah, Danso, Konadu, & Owusu‐Agyei, 2019).…”

Family ownership and environmental performance: The mediation effect of human resource practices

“…Although the importance of family firms in worldwide economies is well recognized (e.g., Prencipe, Bar‐Yosef, & Dekker, ), the relationship between family ownership involvement and a firm's level of sustainability has received less attention (Sharma & Sharma, ). Although most studies have focused on market strategy choices between family and nonfamily firms, there is a lack of agreement on nonmarket strategy choices and the extent to which family ownership leads to higher sustainability (e.g., Adomako, Amankwah‐Amoah, Danso, Konadu, & Owusu‐Agyei, ; Cruz, Larraza‐Kintana, Garcés‐Galdeano, & Berrone, ; Shahzad, Rehman, Nawaz, & Nawab, ). Several literature reviews contain inconsistent and sometimes contradictory results (e.g., Van Gils, Dibrell, Neubaum, & Craig, ) on the relationship between family ownership and environmental practice and performance.…”