Abstract: We contextualize stakeholder theory to examine whether and how environment sustainability practices (ESP) helps focal firms gain competitive advantage in domestic and foreign markets. While previous research on ESP has primarily tried to understand the nature of relationship between ESP and financial performance, we instead focus on uncovering mechanisms by which it may influence a firm’s competitive performance in its targeted markets. Using World Bank’s enterprise surveys in Latin America, our preliminary results indicate that ESP not only helps firms compete better in foreign markets, but that it also helps them build defenses against corruption in their home countries. These results suggest that ESP may offer firms, especially those operating in emerging markets, a strategic option for overcoming institutional constraints and competing better.

Abstract: Firms face a dilemma, specifically how to effectively integrate their economic, social and environmental responsibilities. In the extractive industry context, these firms must mitigate stakeholder conflict and protect their assets through useful and often expensive social projects; but these firms must also ensure that these social projects are sustainable in the long-term and provide lasting socioeconomic benefits to a panoply of stakeholders, critically, without incurring untenable long-term firm costs. We outline a model of sustainable business practice that integrates the economic, social and environmental aspects of business for these extractive firms. We explore the factors of social projects that increase stakeholder ownership and responsibility which increases long term socioeconomic development, decreases social development costs borne by firms, mitigates stakeholder conflict and diminishes overall project risk.

Abstract: There is a dispute in organization research that as whether prior good deeds prevent firms from or license them to wrongdoings. This study attempts to address this dispute by examining the relationship between corporate philanthropy and corporate financial fraud. Drawing on moral licensing theory, we argue that in emerging markets, firms that make charitable contributions to social causes will obtain moral credits from such charitable behaviors, which permit them to engage in unethical behaviors, like corporate financial frauds. However, the above moral licensing effect can be mitigated by stronger formal and informal institutions in terms of market institutions and family control.