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The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy

Muhammad Zahid (), José Moleiro Martins (), Haseeb Ur Rahman (), Mário Nuno Mata (), Syed Asim Shah () and Pedro Neves Mata ()
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Muhammad Zahid: Department of Management Sciences, City University of Science and IT, Peshawar 25000, Pakistan
José Moleiro Martins: ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
Haseeb Ur Rahman: Institute of Management Sciences, University of Science and Technology, Bannu 28100, Pakistan
Mário Nuno Mata: ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
Syed Asim Shah: Department of Management Sciences, Attock Campus, COMSATS University Islamabad, Punjab 43600, Pakistan
Pedro Neves Mata: ISTA-School of Technologies and Architecture, Instituto Universitário de Lisboa (ISCTE-IUL), ISTAR-IUL, Avenida das Forças Armadas, 1649-026 Lisboa, Portugal

Sustainability, 2021, vol. 13, issue 8, 1-14

Abstract: This study aimed to investigate the impact of some important Sustainable Development Goals (SDGs), such as the decent workplace, climate change, and economic sustainability on firm financial performance (see Goals 8 and 13). By adopting an index from the previous literature, this study collected data from the annual and sustainability reports of the publicly listed companies of a developing country through content analysis from 2016 to 2018. The results revealed a significant increase in the level of compliance with workplace and environmental sustainability during the corresponding period. Furthermore, the estimations of ordinary least squares (OLS) and two-stage least squares (2SLS) panel data also unveiled a positive impact of workplace sustainability on the firm’s environmental and financial performance. Additionally, we noted that the findings were pronounced after addressing the problem of endogeneity. Moreover, the study also found a novel significant and positive mediating role of environmental sustainability in the relationship between workplace sustainability and the firm’s financial performance. This study has theoretical significance by proposing sustainability training and development as instrumental variables in the relationship of the workplace and environmental sustainability to firm financial performance. This study offers practical implications for regulatory bodies and business firms to integrate workplace and environmental sustainability practices into their routine operations for achieving sustainable industrialization.

Keywords: decent workplace; sustainability practices; financial performance; index; endogeneity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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