The Impact of Sustainability Performance on Financial Performance: Does Firm Size Matter? Evidence from Turkey and South Korea

Kılıç M., GÜRLER H. E., KAYA A., Lee C. W.

Sustainability (Switzerland), vol.14, no.24, 2022 (SCI-Expanded) identifier

  • Publication Type: Article / Article
  • Volume: 14 Issue: 24
  • Publication Date: 2022
  • Doi Number: 10.3390/su142416695
  • Journal Name: Sustainability (Switzerland)
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Aerospace Database, CAB Abstracts, Communication Abstracts, Food Science & Technology Abstracts, Geobase, INSPEC, Metadex, Veterinary Science Database, Directory of Open Access Journals, Civil Engineering Abstracts
  • Keywords: BIST sustainability index, Dow Jones Sustainability Korea Index, financial performance, firm size, sustainability performance
  • Akdeniz University Affiliated: Yes


© 2022 by the authors.This study investigated the effect of sustainability performance on financial performance in developed and developing countries. It also aimed to determine the moderator effect of firm size. The factor for sustainability performance was listed in the BIST Sustainability Index for Turkey and the Dow Jones Sustainability Korea Index for South Korea. ROE, ROA, ROS, and MV/BV were used as financial performance factors. Companies included in the KOSPI 100 index for South Korea and the BIST 100 index for Turkey were examined. Panel regression analysis and Generalized Method of Moments (GMM) analysis were performed to determine the effect of the past value of financial performance factors on their current value. The results show that the impact of sustainability performance on financial performance differs between South Korea and Turkey. In addition, the moderator variable has a significant effect only on ROA (return on assets) for Turkey and on ROE (return on equity) and ROS (return on sales) for South Korea. The results of the GMM analysis show that the past ROA and ROE values affect the current values statistically and positively for South Korea. For Turkey, the past ROE, ROS, and MV/BV (Market Value/Book Value) positively affect the current values. In addition to theoretical implications, implications for policy-makers and practitioners are also presented. Finally, this study provides significant insights for decision-makers and policy-makers to improve sustainability and corporate responsibility in financial and other similar settings.