Demystifying the impact of moderators in the corporate sustainability performance and firm performance relationship: A meta‐analysis study

Abstract

Over the years, a contentious debate has emerged regarding the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP). To disentangle the confounding results, the present study delves into the concepts of stakeholder and resource‐based view theory, presenting quantitative findings from the existing literature through a meta‐analysis to establish the CSP–CFP relationship. The analysis incorporates 82 studies with 152 effect sizes, revealing a positive and significant nexus between CSP and CFP, with no evidence of publication bias. Additionally, the study explores the direction of causality in this association, demonstrating that prior CSP is associated with improved subsequent CFP, though the reverse is not validated. The study also examines contextual and method moderators responsible for between‐study variance. Notably, the study makes a distinctive and unparalleled contribution by advancing methodological rigor, integrating subgroup analysis with meta‐regression to examine the CSP–CFP nexus. The results provide theoretical contributions, offering valuable insights and suggestions for future research on the CSP–CFP association, thereby paving the way for further scholarly work.