The Effect of Sustainable Production and Operations on Financial Outcomes in Turkish Manufacturing Sector: System Dynamics Evidence From <scp>BIST</scp> ‐Listed Companies

ABSTRACT Sustainable production and operations (SPO) are widely expected to influence firm performance through improvements in efficiency, legitimacy, and organizational capabilities. This study uses ISO certifications as a proxy for SPO and examines both adoption determinants and performance implications using a balanced panel of 142 manufacturing firms listed on the Borsa Istanbul (BIST) over a 10‐year period (2012–2022). An integrated econometric and system dynamics (SD) framework is employed. The econometric results indicate that ISO adoption is associated with firm size, prior financial performance, and selected governance characteristics, although effects vary across certification types. Evidence on performance effects remains limited: while some specifications suggest efficiency gains, results are not robust once persistence and endogeneity are considered, and no consistent relationship is observed for revenue or market valuation. Simulation results suggest that sustainability effects may develop gradually over time, with diminishing returns and increasing uncertainty. Overall, SPO should be viewed as a dynamic, long‐term capability, with ISO certifications affecting performance indirectly through learning and feedback processes.