Sustainable Practices and Performance of Resource-Based Companies: The Role of Internal Control

Xiao Liu, Huanxue Pan (), Weixing Lin, Mengkai Wang and Qiange Zhang
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Xiao Liu: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Huanxue Pan: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Weixing Lin: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Mengkai Wang: School of Business, Renmin University of China, Beijing 100872, China
Qiange Zhang: School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing 100876, China

Sustainability, 2024, vol. 16, issue 4, 1-14

Abstract: As the concept of sustainable resource usage gains popularity, resource-based companies are faced with the challenge of reconciling environmental responsibility with corporate performance to achieve the “coexistence” of environmental and economic benefits. We take data related to RBCs for 2010–2020 and perform a multiple regression analysis of the data. This study focuses on the role of internal control in analyzing the impact of resource-based companies (RBCs) on corporate financial performance (CFP) while assuming corporate environmental responsibility (CER). The findings reveal that the fulfillment of CER by RBCs positively impacts CFP. We then add a moderating test to observe the role of internal controls in the relationship between the two. The results show that the positive effect of CER on CFP is greater with stronger internal control measures. In addition, we introduce heterogeneity analysis to analyze the effect of firm ownership. The moderating effect is diminished in privately owned companies. This research provides empirical evidence for the moderating effect of internal control on the connection between CER and CFP while also considering the influence of ownership.

Keywords: resource-based enterprises; internal control; financial performance; corporate environmental responsibility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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