Green Transformation in Portfolio: The Role of Sustainable Practices in Investment Decisions
Abstract
:1. Introduction
2. Theoretical Background and Hypotheses Formation
2.1. Signaling Theory
2.2. Hypotheses
2.2.1. Green Business Strategies and Organizational Efficiency
2.2.2. Organizational Efficiency and Financial Performance
2.2.3. Mediating Effects of Organizational Efficiency
2.2.4. Financial Performance and Investors’ Investment Decision
2.2.5. Moderation Effects of Management Control
2.2.6. Green Business Strategies and Investment Decisions
3. Methodology
3.1. Data Collection
3.2. Measures
3.3. Analytical Approach
3.4. Ethical Considerations
4. Results and Discussion
4.1. Common Method Bias
4.2. Measurement Model
4.3. Structure Model
4.4. Discussion
5. Implications
5.1. Theoretical Implications
5.2. Practical Implications
6. Conclusions, Limitations, and the Way Forward
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Company Managers’ Demographics | Investors’ Demographics | ||||
---|---|---|---|---|---|
Particulars | Frequency | Percentage | Particulars | Frequency | Percentage |
Gender: | Gender: | ||||
Male Female | 323 229 | 58.51 41.49 | Male Female | 338 214 | 61.23 38.77 |
Age: | Age: | ||||
<30 30–40 41–50 >50 | 55 122 300 75 | 10.0 22.1 54.3 13.6 | <25 25–35 36–50 >50 | 37 153 250 112 | 6.7 27.7 45.3 20.3 |
Industry: | Education: | ||||
Textile Sugar Cement Electronic Leather Pharmaceutical Other | 55 62 70 110 75 128 52 | 9.9 11.2 12.68 19.92 13.6 23.2 9.4 | Bachelor’s Master’s <Master’s | 47 415 90 | 8.5 75.2 16.3 |
Investment: | |||||
<100,000 100,000–500,000 600,000–1,500,000 >1,500,000 | 28 200 231 93 | 5.1 36.2 41.8 16.8 | |||
Experience: | Experience: | ||||
<10 10–15 15–25 >25 | 78 235 180 59 | 14.1 42.6 32.6 10.7 | <5 5–10 11–20 >20 | 133 172 186 61 | 24.1 31.2 33.7 11.1 |
Constructs | Items | FL | A | rho_a | CR | AVE |
---|---|---|---|---|---|---|
Financial Performance (FP) | FP2 | 0.758 | 0.784 | 0.801 | 0.854 | 0.543 |
FP3 | 0.554 | |||||
FP4 | 0.793 | |||||
FP5 | 0.811 | |||||
FP6 | 0.738 | |||||
Green Business Strategies (GBSs) | GBS1 | 0.811 | 0.891 | 0.894 | 0.915 | 0.606 |
GBS2 | 0.852 | |||||
GBS3 | 0.83 | |||||
GBS4 | 0.692 | |||||
GBS5 | 0.731 | |||||
GBS6 | 0.793 | |||||
GBS7 | 0.726 | |||||
Investment Decision (ID) | ID1 | 0.67 | 0.892 | 0.893 | 0.911 | 0.507 |
ID10 | 0.726 | |||||
ID11 | 0.702 | |||||
ID2 | 0.714 | |||||
ID3 | 0.743 | |||||
ID5 | 0.702 | |||||
ID6 | 0.715 | |||||
ID7 | 0.692 | |||||
ID8 | 0.749 | |||||
ID9 | 0.702 | |||||
Management control system (MCS) | MCS1 | 0.776 | 0.909 | 0.916 | 0.927 | 0.614 |
MCS2 | 0.787 | |||||
MCS3 | 0.742 | |||||
MCS4 | 0.82 | |||||
MCS5 | 0.842 | |||||
MCS6 | 0.84 | |||||
MCS7 | 0.817 | |||||
MCS8 | 0.621 | |||||
Organizational innovation (OI) | OI1 | 0.598 | 0.903 | 0.902 | 0.921 | 0.539 |
OI10 | 0.714 | |||||
OI2 | 0.61 | |||||
OI3 | 0.79 | |||||
OI4 | 0.771 | |||||
OI5 | 0.775 | |||||
OI6 | 0.724 | |||||
OI7 | 0.792 | |||||
OI8 | 0.803 | |||||
OI9 | 0.734 | |||||
Products improvements (PDIs) | PDI1 | 0.901 | 0.948 | 0.949 | 0.96 | 0.827 |
PDI2 | 0.904 | |||||
PDI3 | 0.924 | |||||
PDI4 | 0.906 | |||||
PDI5 | 0.912 | |||||
Processes improvement (PI) | PI1 | 0.858 | 0.877 | 0.88 | 0.911 | 0.672 |
PI2 | 0.839 | |||||
PI3 | 0.821 | |||||
PI4 | 0.767 | |||||
PI5 | 0.811 |
Constructs | FP | GBS | ID | MCS | OI | PDI | PI |
---|---|---|---|---|---|---|---|
FP | |||||||
GBS | 0.739 | ||||||
ID | 0.814 | 0.656 | |||||
MCS | 0.485 | 0.357 | 0.284 | ||||
OI | 0.759 | 0.644 | 0.595 | 0.361 | |||
PDI | 0.229 | 0.258 | 0.292 | 0.255 | 0.222 | ||
PI | 0.682 | 0.665 | 0.63 | 0.072 | 0.51 | 0.402 |
Constructs | FP | GBS | ID | MCS | OI | PDI | PI |
---|---|---|---|---|---|---|---|
FP | 0.737 | ||||||
GBS | 0.629 | 0.778 | |||||
ID | 0.71 | 0.59 | 0.712 | ||||
MCS | 0.409 | 0.317 | 0.25 | 0.784 | |||
OI | 0.656 | 0.594 | 0.554 | 0.333 | 0.734 | ||
PDI | 0.202 | 0.242 | 0.269 | −0.237 | 0.211 | 0.91 | |
PI | 0.575 | 0.592 | 0.563 | 0.049 | 0.466 | 0.367 | 0.82 |
Constructs | R-Square | R-Square Adjusted |
---|---|---|
FP | 0.524 | 0.522 |
ID | 0.613 | 0.611 |
OI | 0.392 | 0.389 |
PDI | 0.202 | 0.197 |
PI | 0.382 | 0.379 |
Hypothesis | Original Sample | Sample Mean | Standard Deviation | T Statistics | p Values | Decision |
---|---|---|---|---|---|---|
FP → ID | 0.658 | 0.658 | 0.037 | 17.923 | 0 | Supported |
GBS → ID | 0.179 | 0.18 | 0.041 | 4.313 | 0 | Supported |
GBS → OI | 0.522 | 0.521 | 0.038 | 13.644 | 0 | Supported |
GBS → PDI | 0.377 | 0.378 | 0.038 | 9.836 | 0 | Supported |
GBS → PI | 0.655 | 0.656 | 0.032 | 20.739 | 0 | Supported |
OI → FP | 0.497 | 0.496 | 0.04 | 12.296 | 0 | Supported |
PDI → FP | −0.034 | −0.033 | 0.03 | 1.13 | 0.258 | Not Supported |
PI → FP | 0.356 | 0.357 | 0.044 | 8 | 0 | Supported |
MCSx GBS → OI | −0.13 | −0.129 | 0.032 | 4.107 | 0 | Not Supported |
MCSx GBS → PDI | 0.175 | 0.174 | 0.039 | 4.527 | 0 | Supported |
MCSx GBS → PI | 0.101 | 0.1 | 0.044 | 2.316 | 0.021 | Supported |
Processes Improvement | Effect | S.E. | CIs | Decision |
---|---|---|---|---|
GBS | 0.1481 | 0.0283 | (0.2489, 0.3578) | Supported |
Products improvement | ||||
GBS | −0.0134 | 0.0071 | (−0.0279, 0.0008) | Not Supported |
Organizational innovations | ||||
GBS | 0.167 | 0.0238 | (0.1231, 0.2172) | Supported |
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Li, X.; Khan, I.U. Green Transformation in Portfolio: The Role of Sustainable Practices in Investment Decisions. Sustainability 2025, 17, 1055. https://doi.org/10.3390/su17031055
Li X, Khan IU. Green Transformation in Portfolio: The Role of Sustainable Practices in Investment Decisions. Sustainability. 2025; 17(3):1055. https://doi.org/10.3390/su17031055
Chicago/Turabian StyleLi, Xinyue, and Ikram Ullah Khan. 2025. "Green Transformation in Portfolio: The Role of Sustainable Practices in Investment Decisions" Sustainability 17, no. 3: 1055. https://doi.org/10.3390/su17031055
APA StyleLi, X., & Khan, I. U. (2025). Green Transformation in Portfolio: The Role of Sustainable Practices in Investment Decisions. Sustainability, 17(3), 1055. https://doi.org/10.3390/su17031055