Firm Performance, Sustainability, and Reputation

The first chapter examines the influence of the COVID-19 pandemic on the performance of Sharia-compliant compared to non-compliant firms across countries within the Organization of Islamic Cooperation (OIC). The study employs panel data comprising 337 publicly listed non-financial companies observed from 2016 through 2022. This research employs Ordinary Least Squares (OLS) and Random Effects (RE) regression models to analyze critical performance indicators, including Return on Assets (ROA), Return on Equity (ROE), and growth rates, while integrating various firm-specific characteristics. The analysis uncovers that both adherence to Sharia principles and the COVID-19 crisis significantly reduced firm performance. Sharia-compliant companies experienced sharper decreases in profitability and growth, attributed primarily to ethical financing limitations and conservative investment approaches. The adverse effects were worsened by the interplay between Sharia compliance and pandemic conditions, with companies in Asian regions being particularly impacted, thereby illustrating significant regional variability. The second chapter conducts an empirical investigation into the relationship between Environmental, Social, and Governance (ESG) practices and corporate reputation, thereby addressing a significant research gap within the area of sustainability studies. The analysis utilizes a comprehensive panel dataset covering 4,000 U.S. companies from 2014 to 2023. Through the application of econometric methodologies, including logistic regression, Ordinary Least Squares (OLS), Two-Stage Least Squares (2SLS), Propensity Score Matching (PSM), Entropy Balancing, and Heckman selection models, this study tackles the issues of potential endogeneity and selection bias. The findings consistently indicate that companies exhibiting higher ESG scores are significantly more likely to receive corporate responsibility accolades. This relationship is further strengthened by firm-specific factors, including company size, financial stability, and investments in research and development. Robustness checks reinforce these findings, emphasizing the strategic significance of Environmental, Social, and Governance (ESG) initiatives in enhancing corporate reputation, encouraging stakeholder trust, and attaining sustainable competitive advantage. The second essay is an empirical study of the relationship between environmental, social, and governance (ESG) performance and corporate reputation. The goal is to address the existing gap in sustainability literature. This study employs a comprehensive panel dataset that includes 4,000 US firms from 2014 to 2023. The aim of this study is to investigate how ESG performance influences corporate reputation through annual and cumulative corporate responsibility awards. The study utilizes various econometric techniques to tackle issues concerning endogeneity and sample selection bias. The econometric techniques include logistic regression, Ordinary Least Squares (OLS), Two-Stage Least Squares (2SLS), Propensity Score Matching (PSM), Entropy Balancing, and Heckman selection models. The results consistently show that companies with better ESG performance are significantly more likely to be acknowledged with corporate responsibility awards. The strength of these findings is supported by various robustness analyses. The study examines how firm-specific characteristics, including company size, financial performance, and research and development, influence the relationship between ESG engagement and reputation outcomes. The evidence indicates that these factors enhance the positive impact of ESG performance on corporate reputation. The findings highlight the strategic value of ESG initiatives for corporate leaders and policymakers, which emphasizes their role in enhancing stakeholder trust and securing long-term competitive advantages.