Document Type

Article

Version Deposited

Accepted for publication (PostPrint)

Publication Date

1-1-2012

Publication Title

Int'l J. of Business Insights and Transformation

Abstract

Sustainability has become an important strategy for service industries to compete globally. It is as important for service industries to meet their social responsibilities and create value for their stakeholders as their manufacturing counterparts. Service oriented companies are increasingly pursuing sustainability strategies for not only doing “good” for the society but also to translate the goodwill earned to add to their bottom line. Our study examines the impact of Corporate Sustainability Performance (CSP) on a firm’s economic performance in service industries. The primary focus of this study is to establish relationships between corporate sustainability strategies and concomitant economic performance in the context of service industries. As such, this research establishes the directions and magnitudes of the operational relationships between a service firm’s environmental and social performance relative to its economic performance after controlling key strategic factors inherent of service related industries. The results indicate that a firm’s environmental and social performances are significant determinants for improving the overall performance of the firm, particularly, with respect to market-based performance in these industries across the countries included in the study. Further, the accounting-based performance appears to be significantly linked to the social Pacific Sustainability Index (PSI) scores as a proxy measure of the corporate social responsibility and reputation. The combined effects of both environmental and social performance on a firm’s overall performance, particularly market based performance, is also remarkably significant. The findings extend the research of Lee, Pati, Roh (2011) to service industries.

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