Corporate Transformation toward Industry 4.0 and Financial Performance: The Influence of Environmental, Social, and Governance (ESG)

F. Alkaraan, K. Albitar, Khaled Hussainey () and V.G. Venkatesh
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V.G. Venkatesh: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School

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Abstract: Despite the importance of corporate transformation toward Industry 4.0 (CTTI4.0), almost no research exists on how companies communicate CTTI4.0 information in their annual reports and how this affects financial performance. To fill this gap, this paper uses computer-aided textual analysis to explore the current practices of CTTI4.0 in the UK context. It also uses quantitative analysis to examine the impact of CTTI4.0 information on financial performance. The analysis shows that strategic investment decision-making (SIDM) practices for CTTI4.0 have accelerated over the period, and these practices vary in industry sectors. Furthermore, it finds that CTTI4.0 disclosure has a positive impact on financial performance. In addition, it finds that environmental, social, and governance (ESG) practices moderate the relationship between CTTI4.0 disclosure and financial performance. This indicates that firms with better ESG performance tend to be more engaged in CTTI4.0 disclosure and better financial performance simultaneously. Our findings offer insights to decision-makers and regulatory bodies regarding the current practices of CTTI4.0 and its potential economic impact. Paper type: Research paper. \textcopyright 2021

Keywords: Binary alloys; Business model; Business models; Circular economy; Computer aided analysis; corporate social responsibility; Corporate transformations; Current practices; decision making; Decision making; Decision-making; Decisions makings; Economic and social effects; economic impact; environmental impact assessment; Environmental; social; and governance; ESG; finance; Financial performance; governance approach; industrial performance; Industry 4.0; investment; Investments; Strategic investment; Strategic investments; Transformation; UK; companies; UK; company; United Kingdom (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (29)

Published in Technological Forecasting and Social Change, 2022, 175, ⟨10.1016/j.techfore.2021.121423⟩

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Journal Article: Corporate transformation toward Industry 4.0 and financial performance: The influence of environmental, social, and governance (ESG) (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04445029

DOI: 10.1016/j.techfore.2021.121423

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