Determinants of Corporate Sustainability in Emerging Markets: Evidence from the Tehran Stock Exchange (مقاله پژوهشی دانشگاه آزاد)

چکیده

Objectives: This study investigates the determinants of corporate sustainability among firms listed on the Tehran Stock Exchange (TSE), focusing on firm-specific, market-specific, and institutional factors shaping environmental, social, and governance (ESG) performance. Methodology/Design/Approach: Data from 150 firms over the period 2013–2022 were analyzed using a fixed effects panel data regression model. Subgroup analyses were also conducted to explore variations across industries, firm sizes, and firm ages. Findings: The results highlight innovation capacity (β=0.030, p<0.01) as the most significant driver of ESG performance, underscoring the critical role of research and development in advancing sustainability practices. Institutional ownership and political stability also exhibit strong positive effects, reflecting the importance of governance structures and stable institutional environments in shaping corporate behavior. Firm size and regulatory quality further emerge as significant determinants, with heterogeneity observed across subgroups: innovation capacity is particularly impactful in resource-intensive industries and younger firms, while institutional ownership and regulatory quality play stronger roles in service-oriented sectors and larger firms. Innovation: This research contributes to the sustainability literature by providing evidence on how firm-level capabilities, governance mechanisms, and institutional conditions jointly influence ESG outcomes. The findings offer actionable insights for policymakers—such as enhancing regulatory quality, fostering political stability, and incentivizing innovation—and for managers seeking to strengthen R&D investment and governance practices to improve ESG performance and competitive positioning.