Campus Units
Supply Chain and Information Systems
Document Type
Article
Publication Version
Accepted Manuscript
Publication Date
12-28-2020
Journal or Book Title
International Journal of Production Research
Volume
Latest Articles
DOI
10.1080/00207543.2020.1856435
Abstract
The empirical literature considers firm-specific aspects affecting corporate sustainability decisions but generally omits the influence of the competition. We advocate that sustainability actions of a company impact its marketplace and vice versa. Therefore, the sustainability return of the single firm is a function of the other firms’ sustainability decisions. We approach sustainability decisions as strategic decisions and evaluate the effect of competition and spillovers in a static market entry game. We estimate the parameters of the discrete choice model using the social performance ratings from MSCI KLD 400 Social Index as proxy for sustainability decisions and financial information from Wharton Research Data Services’ COMPUSTAT dataset. When strategic interaction is not accounted for, we find that an increase in the number of competitors increases the likelihood of sustainability investments, seemingly shows the spillover effect dominates the competition. When we apply the multi-stage approach, which incorporates competitive interaction, we provide empirical evidence that the effect of competition on the likelihood of entry into the sustainability market dominates the effect of spillover. We find that strategic motives, typically ignored in the empirical literature, appear to be an important factor in understanding sustainability-related decisions.
Copyright Owner
Taylor & Francis
Copyright Date
2020
Language
en
File Format
application/pdf
Recommended Citation
Soytas, Mehmet Ali; Usar, Damla Durak; and Denizel, Meltem E. K.,, "Estimation of the static corporate sustainability interactions" (2020). Supply Chain Management Publications. 95.
https://lib.dr.iastate.edu/scm_pubs/95
Included in
Management Information Systems Commons, Management Sciences and Quantitative Methods Commons, Operations and Supply Chain Management Commons, Organizational Behavior and Theory Commons
Comments
This accepted article is published as Soytas, M.A., Usar, D.D., Denizel, M.E.K., Estimation of the static corporate sustainability interactions. International Journal of Production Research. December 2020, Latest Articles; doi: 10.1080/00207543.2020.1856435. Posted with permission.