Determinants of corporate sustainability performance in emerging markets: the Brazilian case

This study investigates the factors that drive high levels of corporate sustainability performance in an emerging country, Brazil. The level of said performance is proxied by membership of the Bovespa Corporate Sustainability Index. Using a framework combining stakeholder theory and a resource-based perspective, we examine the incentives for Brazilian listed firms to invest in corporate sustainability and develop a number of hypotheses that relate corporate sustainability performance both with operating and with financing characteristics. Our results indicate that Brazilian leading corporate sustainability performance firms are significantly larger and have a larger return on equity than their counterparts, which is consistent with previous findings for US firms. Additionally, Brazilian leading corporate sustainability performance firms also have significantly lower ownership concentration and they are more likely to have international listing status than their counterparts. Thus, our findings suggest that financing characteristics are likely to have higher significance in determining corporate sustainability performance in emerging markets, such as Brazil, than in developed countries.