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Entrepreneurship, Finance and Sustainability

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (19 July 2019) | Viewed by 80520

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Special Issue Editors

Prof. Dr. Ine Paeleman

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Guest Editor

Faculty of Business and Economics, University of Antwerp, Prinsstraat 13, 2000 Antwerpen, Belgium
Interests: entrepreneurial finance; certified B corporations; internationalization
Special Issues, Collections and Topics in MDPI journals

Prof. Dr. Tom Vanacker

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Guest Editor

Faculty of Economics and Business Administration , Ghent University, Gent, Belgium & University of Exeter Business School, University of Exeter, Exeter, UK
Interests: entrepreneurial finance; venture capital; firm growth
Special Issues, Collections and Topics in MDPI journals

Prof. Dr. Mirjam Knockaert

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Guest Editor

Department of Innovation, Entrepreneurship and Service Management, Ghent University, Belgium and Centre of Entrepreneurship, University of Oslo, Norway
Interests: High-tech and innovative entrepreneurship; Technological and academic entrepreneurship; Nascent entrepreneurial process; Intermediaries (VCS, technology intermediaries) and their impact on the entrepreneurial process and its outcomes

Special Issue Information

Dear Colleagues,

Social enterprises have gained increasing attention within the entrepreneurship research field. The growing importance of corporate social responsibility and corporate citizenship suggests that, to be successful, firms can no longer solely focus on financial performance (Dentchev, 2009). Although financial performance remains crucial for survival, there is a growing consensus that ignoring the impact on the environment and the local community can have detrimental effects for firms and can, as a consequence, be a threat for the sustainability of firms. Social enterprises engage in commercial activities to solve social or ecological problems. As such, they face the challenge of pursuing both financial sustainability and social goal achievement. There is a growing interest in how social enterprises deal with their hybrid nature. Future research may address what makes newly created as well as established social enterprises successful in fulfilling their financial and social goals and how they deal with the challenges they are confronted with. More research is needed “to explore the role of entrepreneurial action as a mechanism for sustaining nature and ecosystems while providing economic and non-economic gains for investors, entrepreneurs and societies” (Shepherd and Patzelt, 2011: 138). Furthermore, fast-evolving financial markets offer a plethora of novel financing sources such as crowdfunding that may help young and innovative social enterprises to bridge the financing gap and grow (Calic and Mosakowski, 2016). Yet, the evidence on how these new sources interact with the traditional ones, what are the concomitant (dis)advantages, and the subsequent firm performance implications, especially within a sustainable context, are lacking (Siqueira et al., 2018). In this Special Issue, we are looking to publish papers that critically investigate the link between entrepreneurship, finance and sustainability from a range of theoretical, methodological and disciplinary perspectives.

Papers could focus on (but are not limited to) the following topics:

(How) do entrepreneurs, small business managers and providers of entrepreneurial finance integrate sustainability into their strategies?
How will social ventures be financed? How are social ventures differently financed compared to commercial ventures?
(How) do distinct sources of entrepreneurial financing (including venture capital and business angels) influence the distinct aspects of performance (e.g., financial, environmental, and human) of their portfolio firms? How do investors contribute (or not) to the sustainability of their portfolio firms?
Which aspects of performance (e.g., financial, environmental, and human) are important for social enterprises? Does this importance differ for different kinds of firms: start-ups versus mature firms, small and medium-sized enterprises versus large firms, commercial versus social ventures?
Are different aspects of financial and non-financial (early stage) performance related?
How can the non-financial performance of entrepreneurial firms be assessed? What are the appropriate performance indicators to measure firm performance, with respect to both financial and non-financial performance? Do these indicators differ for different kinds of firms?
What are the antecedents of the different aspects of performance, and how will they influence the sustainability of entrepreneurial firms?
How do management control systems influence the distinct aspects of performance (e.g., financial, environmental, and human) and sustainability of firms? How are sustainability objectives (environmental, human, society) incorporated in management control systems?

Prof. Dr. Ine Paeleman
Prof. Dr. Tom Vanacker
Prof. Dr. Mirjam Knockaert
Guest Editors

References:

Calic, G., & Mosakowski, E. (2016). Kicking off social entrepreneurship: How a sustainability orientation influences crowdfunding success. Journal of Management Studies, 53(5), 738–767.
Dentchev, N. A. (2009). To what extent is business and society literature idealistic? Business & Society, 48(1), 10–38.
Shepherd, D. A., & Patzelt, H. (2011). The new field of sustainable entrepreneurship: Studying entrepreneurial action linking “what is to be sustained” with “what is to be developed”. Entrepreneurship Theory and Practice, 35(1), 137–163.
Siqueira, A. C. O., Guenster, N., Vanacker, T., & Crucke, S. (2018). A longitudinal comparison of capital structure between young for-profit social and commercial enterprises. Journal of Business Venturing, 33(2), 225–240.

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

entrepreneurship
finance
sustainability

Published Papers (12 papers)

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Research

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17 pages, 283 KiB

Open AccessArticle

Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea

by Su-In Kim, Hyejeong Shin, Heejeong Shin and Sorah Park

Sustainability 2019, 11(16), 4445; https://doi.org/10.3390/su11164445 - 16 Aug 2019

Cited by 9 | Viewed by 3752

Abstract

This paper examines whether organizational slack is associated with firms’ voluntary disclosure of corporate social responsibility (CSR), sustainability, and integrated reporting. This is an empirical research study using archival data based on a sample of public firms listed on the Korea Exchange from 2005 to 2016. We manually collected CSR reports, sustainability reports, and integrated reports (IRs) that were published during our sample period. We found that human resource slack was highly related to the publication of corporate social responsibility, sustainability, and integrated reports. Firms initiating such disclosure in their industry groups were likely to have slack in permanent employees as well as financial slack. Additionally, integrated reporting, which is a recent improvement in the delivery of financial and non-financial information, was positively associated with an excess number of regular employees. This study provides evidence that slacks in regular employees are related to a greater degree of voluntary disclosure via standalone CSR or sustainability reporting as well as integrated reporting. These findings suggest that slacks or excess human resources play a crucial role in voluntary corporate disclosure. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

20 pages, 471 KiB

Open AccessArticle

Environmental vs. Social Responsibility in the Firm. Evidence from Italy

by Giovanni Ferri and Marco Pini

Sustainability 2019, 11(16), 4277; https://doi.org/10.3390/su11164277 - 07 Aug 2019

Cited by 16 | Viewed by 3531

Abstract

Sustainable behavior should necessarily benefit both the environment and society. However, we cannot take for granted that socially responsible firms are also environmentally responsible—e.g., a firm might benefit its stakeholders while degrading the environment—and the reverse applies too—e.g., an environmentally responsible firm might disrespect its employees. Consequently, our purpose is checking whether social responsibility and green investments—proxying for a firm’s environmental responsibility—are complements, substitutes, or unrelated choices. Using a representative sample of Italian manufacturing firms, our econometric estimates uncover the empirical relationship between social responsibility and green investments at firm level. We find evidence of complementarity, since socially responsible firms: (i) Are systematically more likely to make green investments; (ii) identify green investments as a voluntary choice promoting business competitiveness much more than other firms. Finding complementarity between social and environmental responsibility has important implications. Policies favoring the transition to sustainable development should adopt a systemic approach considering the positive spillovers of Corporate Social Responsibility (CSR) on environmental responsibility. Our evidence also suggests that firms indeed tend to behave in ways consistent with the holistic approach of the 2030 UN Agenda for sustainable development. Additional research should study how governance affects the CSR–environmental responsibility nexus. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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16 pages, 742 KiB

Open AccessArticle

Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe

by Mihai Precup

Sustainability 2019, 11(15), 4080; https://doi.org/10.3390/su11154080 - 28 Jul 2019

Viewed by 2667

Abstract

The objective of this paper is to identify the main barriers to sustainable private equity market development in emerging European countries. The cross-country panel data analysis that was used in this paper will focus on the main determinants of the private equity investments over the period 2000–2013. We followed the methodology developed by Gompers and Lerner in order to estimate a panel data model with fixed and random effects. Starting from the existing literature, we analyzed variables that were confirmed by the previous studies and we also introduce new variables, such as the corruption index, uncertainty index, and regulation. The results of our study confirmed the existing hypothesis regarding the barriers to private equity development, such as the unemployment rate, the lack of exit mechanisms due to the low level of market capitalization, and the corruption. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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13 pages, 255 KiB

Open AccessArticle

Empirical Evidence on Environmental Performance and Operating Costs

by Christian Dreyer, Nadja Guenster and Jakob Koegst

Sustainability 2019, 11(13), 3600; https://doi.org/10.3390/su11133600 - 30 Jun 2019

Cited by 1 | Viewed by 3718

Abstract

Theoretical arguments suggest that better environmental performance can lead to cost advantages through a more efficient use of resources and higher labor productivity. To provide empirical support for these arguments, we investigate how environmental performance affects operating costs using a sample of 785 U.S. firms for the period 2006–2014. We find that better environmental performance is negatively associated with direct production costs, but increases overhead costs. Because direct production costs have a larger impact than overhead costs, aggregate operating costs decline as environmental performance improves. To deal with endogeneity and to interpret the results causally, we use an instrumental variables approach. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

17 pages, 265 KiB

Open AccessArticle

Environmental Innovation and Firm Performance: How Firm Size and Motives Matter

by Petra Andries and Ute Stephan

Sustainability 2019, 11(13), 3585; https://doi.org/10.3390/su11133585 - 29 Jun 2019

Cited by 64 | Viewed by 7472

Abstract

There is limited understanding of the precise circumstances under which environmental actions—such as environmental innovation—contribute to firm performance. Building on the resource-based view and on stakeholder theory, this study argues that the general positive effect of environmental innovation on financial performance varies significantly with firm size and the motives underlying a firm’s engagement in environmental innovation. Integrating survey data and lagged annual account data on 1761 Flemish companies, we find that larger firms benefit financially from environmental innovation driven by regulation or industry codes of conduct, while smaller firms benefit from environmental innovation introduced in response to customer demand. While it is increasingly accepted that environmental innovation relates positively with firm performance, the current study highlights important boundary conditions of this relationship. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

20 pages, 1309 KiB

Open AccessArticle

The Role of a Manager’s Intangible Capabilities in Resource Acquisition and Sustainable Competitive Performance

by Qianwei Ying, Hazrat Hassan and Habib Ahmad

Sustainability 2019, 11(2), 527; https://doi.org/10.3390/su11020527 - 19 Jan 2019

Cited by 78 | Viewed by 8076

Abstract

The answer to the challenging question, “Should one either invest in tangible resources or intangible resources/capabilities?” is still fragmented. In prior studies, more emphasis is given to tangible resources, while intangible resources have comparatively received minor attention, despite their significant role in the success of small and medium enterprises (SMEs). Particularly the role of the intangible skills; intellectual capital, financial literacy (FL), and business experience (BE) in resource acquisition and sustainable competitive performance has missed in prior studies. Grounded on the resource-based view and upper echelon theory, this study examines the role of intellectual capital in sustainable competitive performance with a mediating role of resource acquisition. This research also assesses the moderating role of financial literacy and business experience between intellectual capital and resource acquisition. Data are collected through structured questionnaires from 384 owners/managers of Pakistani SMEs. After analyzing the data through structural equation modeling (SEM), the results indicate that intellectual capital helps managers in acquiring valuable resources, which in turn enhance sustainable competitive performance. Resource acquisition partially mediates the relation between intellectual capital and sustainable competitive performance. Financial literacy is a significant predictor of resource acquisition, but it does not significantly moderate the relation between intellectual capital and sustainable competitive performance. Business experience significantly boosts the acquisition of resources and strengthens the path between intellectual capital and resource acquisition. SMEs should encourage their managers to acquire unique, rare, and immutable external resources in the turbulent markets. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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416 KiB

Open AccessArticle

Capturing the Stakeholders’ View in Sustainability Reporting: A Novel Approach

by Nicola Bellantuono, Pierpaolo Pontrandolfo and Barbara Scozzi

Sustainability 2016, 8(4), 379; https://doi.org/10.3390/su8040379 - 16 Apr 2016

Cited by 64 | Viewed by 13924

Abstract

Sustainability reporting is the process by which companies describe how they deal with their own economic, environmental, and social impacts, thus making stakeholders able to recognize the value of sustainable practices. As stressed in the Global Reporting Initiative guidelines, which act as a de facto standard for sustainability reporting, sustainable reports should take into account the stakeholders’ view. In particular, engaging stakeholders is essential to carry out the materiality analysis, by which organizations can identify their own more relevant sustainability aspects. Yet, on the one hand, the existing guidelines do not provide specific indications on how to get stakeholders actually engaged; on the other hand, research on quantitative techniques to support stakeholder engagement in materiality analysis is scarce. Therefore, the purpose of this paper is the development of a quantitative structured approach based on multi-attribute group decision-making techniques to effectively and reliably support stakeholder engagement during materiality analysis in sustainability reporting. As it more strictly guides the reporting process, the proposed approach at the same time simplifies materiality analysis and makes it more reliable. Though any company can adopt the approach, small- and medium-sized enterprises (SMEs) are expected to particularly benefit from it, due to the quite limited implementation effort that is required. With this respect, the approach has been validated on a sample of Italian SMEs belonging to different sectors. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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1572 KiB

Open AccessArticle

The Development of a Measurement Instrument for the Organizational Performance of Social Enterprises

by Saskia Crucke and Adelien Decramer

Sustainability 2016, 8(2), 161; https://doi.org/10.3390/su8020161 - 06 Feb 2016

Cited by 48 | Viewed by 10128

Abstract

There is a growing consensus that the adoption of performance measurement tools are of particular interest for social enterprises in order to support internal decision‐making and to answer the demands of accountability toward their stakeholders. As a result, different methodologies to assess the non‐financial performance of social enterprises are developed by academics and practitioners. Many of these methodologies are on the one hand discussions of general guidelines or, on the other hand, very case specific. As such, these methodologies do not offer a functional tool for a broad range of social enterprises. The goal of this article is to fill this gap by developing an instrument suitable for the internal assessment and the external reporting of the non‐financial performance of a diverse group of social enterprises. To reach this goal, we used qualitative (focus groups and a Delphi panel) and quantitative research methods (exploratory and confirmatory factor analysis), involving multiple actors in the field of social entrepreneurship. Focusing on five dimensions of organizational performance (economic, environmental, community, human and governance performance), we offer a set of indicators and an assessment tool for social enterprises. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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410 KiB

Open AccessArticle

Factors Influencing the Identification of Sustainable Opportunities by SMEs: Empirical Evidence from Zambia

by Progress Choongo, Elco Van Burg, Leo J. Paas and Enno Masurel

Sustainability 2016, 8(1), 81; https://doi.org/10.3390/su8010081 - 15 Jan 2016

Cited by 47 | Viewed by 10652

Abstract

This study uses the model of Patzelt and Shepherd (2011) to examine the factors influencing the identification of sustainable opportunities among SMEs in a developing country, Zambia. The factors under investigation include knowledge of the natural/social environment, perception of threats to the natural/social environment, altruism towards others and entrepreneurial knowledge. We interviewed 220 owner-managers in the trading and service sector who supply goods and services to the mining industry in Zambia. We found that altruism towards others was partially supported by our empirical results while the positive effects of knowledge of the natural/social environment and perception of threats to the natural/social environment on the identification of sustainable opportunities were not supported. Contrary to our expectations, entrepreneurial knowledge does not positively moderate the relationship between explanatory variables and the identification of sustainable opportunities. In sum, we found only limited empirical support for the model of Patzelt and Shepherd (2011) concerning the identification of sustainable opportunities. Our findings contribute to literature on entrepreneurship and sustainable opportunity identification by showing what factors influence the identification of sustainable opportunities. This can help us to create awareness among entrepreneurs regarding the effects of entrepreneurial activities on the environment and society; consequently, stimulating entrepreneurs to identify sustainable opportunities. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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698 KiB

Open AccessArticle

Entrepreneurial Judgment and Value Capture, the Case of the Nascent Offshore Renewable Industry

by Truls Erikson, Nicolai S Løvdal and Arild Aspelund

Sustainability 2015, 7(11), 14859-14872; https://doi.org/10.3390/su71114859 - 06 Nov 2015

Cited by 5 | Viewed by 4340

Abstract

Entrepreneurship may be regarded as the mechanism of change towards sustainability. Any entrepreneur that seeks to start a new venture in an emerging industry will face resource and time constraints. The question we raise here is how the entrepreneur should prioritize use of time and resources to increase likeliness of success. To address this question we depart from a theoretical perspective of entrepreneurship seen as judgment, and bridges it over to entrepreneurship seen as co-creation. In other words, we combine the subjective with the intersubjective, and explore the effects of the actions successful green technology entrepreneurs in the emerging offshore renewable energy industry make in building their new ventures in nascent markets. Inspired by earlier studies on market entry, combined with new ways to understand new venture emergence, we find that independent entrepreneurs benefit from leapfrogging typical stages in the technology development process and rather devote time and efforts on resource acquisition. We also find that the most important value-capturing, decision-making heuristics are those related to “hybrid governance”. We discuss implications for theory, practice, and policy. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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35 pages, 2202 KiB

Open AccessHypothesis

Performance Measurement for Sustainability: Does Firm Ownership Matter

by Thi Cam Tu Luong, Ann Jorissen and Ine Paeleman

Sustainability 2019, 11(16), 4436; https://doi.org/10.3390/su11164436 - 16 Aug 2019

Cited by 5 | Viewed by 4032

Abstract

Based on contingency and agency insights, this study examines the influence of ownership characteristics on performance measurement systems (PMSs) and outcome-based compensation systems driven by differences in organizational goals and objectives between state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs) in Vietnam. The influence of ownership characteristics on the design of PMSs received little attention from researchers so far. Moreover, the few studies that are available so far only examined the relationship between firm ownership characteristics and the presence and use of economic performance indicators and economic outcome-based compensation in firms. In this study, the scope of PMSs is broader, and sustainability indicators focusing on community programs, ethical behavior, and government regulation are included in addition to economic based indicators. Analyzing survey data with the use of partial least squares (PLS) structural equation modeling (SEM), we find that the higher the share of the government in an organization’s capital is, the significantly more governmental duty indicators and significantly fewer ethical indicators and economic indicators are included in the PMS and outcome-based compensation systems. The inclusion of community indicators is not associated with firm ownership characteristics. Meanwhile, non-SOEs include significantly more economic value indicators, but no societal measures, like ethical, community-oriented, and governmental duty indicators. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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1029 KiB

Open AccessCase Report

Teaching Case: ViaVia Yogyakarta: Choosing the Right Strategy to Maximize Social Impact

by Petra Andries and Alain Daou

Sustainability 2016, 8(1), 70; https://doi.org/10.3390/su8010070 - 12 Jan 2016

Cited by 2 | Viewed by 6510

Abstract

This teaching case addresses the strategic choices of social entrepreneurs, Mie and Ingvild, who founded the ViaVia café in Yogyakarta, Indonesia. In their daily management of ViaVia , Mie and Ingvild put respect for local culture and ideals above short-term profit. They offered good working conditions for staff with opportunities to learn and grow, which resulted in a loyal group of employees who felt a sense of ownership of ViaVia. Furthermore, the organization was involved in a multitude of social, cultural, environmental and humanitarian projects. As a result, ViaVia was regarded as a positive contributor to the local community. In 2013, it secured international recognition for its efforts by receiving the prestigious Wild Asia Responsible Tourism Award. However, Mie and Ingvild wondered whether the support of many projects was perhaps spreading their resources too thin, and whether greater impact could be generated with fewer but more focused initiatives. Despite ViaVia’s success as a social enterprise, Mie and Ingvild reviewed the past 20 years of the café’s existence and contemplated the sustainable strategy that they should follow in the years ahead. Full article

(This article belongs to the Special Issue Entrepreneurship, Finance and Sustainability)

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