Environmental Sustainability Commitment and Financial Performance of Firms Listed on the Johannesburg Stock Exchange (JSE)

Does it pay for firms to adopt environmental protection devices? An empirical examination in Cameroon

The decision to adopt environmental protection policies within companies is faced with the fear of negative repercussions on performance. The aim of this paper is to analyse the effect of adopting environmental protection measures on the performance of VSEs in the tertiary sector in Cameroon. The use of linear models and matching methods such as Propensity Score Matching (PSM) and Multivariate Distance Matching (MDM) reveals a positive influence on performance. However, not all environmental protection measures produce such an effect. When the channel of influence is checked, structural equation models of the path analysis type show that costs are a non-negligible transmission channel. However, a difference in the mechanism of action depending on the device adopted is found. An analysis of the heterogeneity of the effect of adopting environmental protection measures shows that the effect is not identical according to the number of years in business and the size of the company. The results of building a region-sectoral instrument applied to the IV method attest to the robustness of our results. The study encourages companies to behave in an environmentally friendly way and confirms the need for public authorities to support them without forcing them to do so.

Environmental Sustainability Commitment and Access to Finance by Small and Medium Enterprises: The Role of Financial Performance and Corporate Governance

Small and Medium Enterprises in South Africa contribute critically to the economy, yet they face many challenges, such as lack of access to external finance. Thus, applying the stakeholder theory, this study tested the relationship between environmental sustainability commitment and access to finance and whether this relationship was mediated by financial performance. The study further examined the moderating role of corporate governance on the relationship between environmental sustainability commitment and access to finance. Owner/managers of 600 SMEs from three provinces in South Africa were randomly selected using a probability sampling method. Primary data were collected using self-administered questionnaires. The moderated mediation model was tested using PLS-SEM. The findings showed that environmental sustainability commitment significantly predicts access to finance both directly and indirectly through financial performance. Moreover, the results showed that corporate governance positively moderates the link between environmental sustainability commitment and access to finance. This study has several implications. Practically, small unlisted firms can adopt and apply the model developed in this study to enhance their environmental, social, and governance practices to unlock external funding. The novelty of this study is that it proposed and tested a moderated mediation model to understand SMEs’ determinants of access to finance. In addition, this study provides a nuanced understanding of responsible business through green behaviour in the context of SMEs, which has been lacking in the existing literature.

The Nexus between Financial Performance and Equilibrium: Empirical Evidence on Publicly Traded Companies from the Global Financial Crisis Up to the COVID-19 Pandemic

Financial performance and financial equilibrium are two key aspects that should be monitored by any business manager interested in passing the test of time and overcoming unpredictable events such as economic crises. The organic link between financial performance and financial equilibrium has rarely been studied in the long run for companies listed on the stock market. The present article fills this gap in the literature by examining the degree to which financial performance influenced long-term financial equilibrium using data from 34 major companies publicly traded on the New York Stock Exchange and operating around the world in a wide variety of industries and sectors. The period of analysis spread over a decade (2007Q1–2020Q3) in order to cover two major crises that have marked the dawn of the third millennium and occurred relatively close to one another: the 2008 financial meltdown and the COVID-19 pandemic crisis. By means of panel data modelling, the study showed that the short-term and long-term financial equilibria of these public companies measured by current ratio, quick ratio and debt to equity ratio were significantly impacted by different financial performance indicators. The study addresses various implications of the empirical results and lays out avenues for future research.