Greening growth: maximising corporate reputation through sustainable synergy in Malaysia and Indonesia’s oil & gas industry

Abstract

Previous research efforts have identified that the combined effect of stakeholder engagement (SE) and Corporate Social Responsibility (CSR) has important strategies for shaping the reputation of oil & gas (O&G) industries. However, there are limited efforts to understand how green dynamic capability (GDC) can mediate between these strategies for improved corporate reputation (CR) of O&G industries. Against this backdrop, this study explored GDC’s mediating effect on SE and CR in Malaysia and Indonesia. The conceptual model and its mediating effect, previously overlooked, were examined and statistically analysed. The study used convenience sampling, gathering survey data from local communities on the east coast of Malaysia and Kelurahan Parigi Baru, Indonesia. A total of 500 responses were collected, with 435 valid samples for the final analysis. PLS-SEM and SPSS were used to test the research hypotheses. Findings revealed that both SE and CSR have a positive and statistically significant direct effect on CR. CSR further strengthens CR by demonstrating a company's social and environmental commitment, improving public perception, and corporate legitimacy. Furthermore, GDC mediates, enabling adaptable, sustainable organisations to leverage SE and CSR better to enhance CR. This highlights the need for sustainable, innovative strategies to maintain competitiveness and social responsibility in the O&G industry. This study offers key insights for policymakers and industry leaders on SE, CSR, and GDC in CR while advancing stakeholder theory, dynamic capabilities and sustainability, especially in emerging economies.