The Impact of B Corp Certification on Growth

Valerie Paelman, Philippe Van Cauwenberge and Heidi Vander Bauwhede
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Valerie Paelman: Department of Accounting, Corporate Finance and Taxation, Ghent University, 9000 Ghent, Belgium
Philippe Van Cauwenberge: Department of Accounting, Corporate Finance and Taxation, Ghent University, 9000 Ghent, Belgium
Heidi Vander Bauwhede: Department of Accounting, Corporate Finance and Taxation, Ghent University, 9000 Ghent, Belgium

Sustainability, 2021, vol. 13, issue 13, 1-16

Abstract: We empirically test whether B Corp certification affects the short- and medium-term growth rates of sustainable enterprises. These businesses are growing in popularity and prevalence but, due to their hybrid nature, often suffer from external credibility issues and competing internal logics. Because of the rigorous and time-involving audit procedure, B Corp certification potentially sends a credible signal about the sustainable nature of the enterprise to its stakeholders. In addition, the B Corp label could help to straighten out internal tensions and align the company towards its dual purpose. Hence, B Corp certification could contribute to company success. We observe 129 firms that were certified between 2013 and 2018 over a period between six years prior and five years post-certification. Using propensity score matching, we identify 129 non-certified matching companies. On this sample, we conduct a difference-in-differences panel regression analysis to investigate the effect of certification. Our dataset allows us to study how the effects of B Corp certification evolve over time, which was previously untested. Our study documents a positive effect of B Corp certification on turnover growth and also that this effect increases with the time since certification, implying that certification requires some time for its full effect to become apparent.

Keywords: hybrid enterprises; sustainability certification; impact measurement; B Corp certification; sustainable enterprises; growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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