Recent years have witnessed continuous rise in adopting green innovations which is considered as an important organizational instrument to achieve profits by reducing environmental deterioration. However, green innovation in developing countries, especially in Pakistan, is surprisingly scant as compared to developed countries. This paper empirically investigated obstacles to green innovations in Pakistani manufacturing firms. Specifically, a novel three phase methodological framework was applied to investigate significant barriers and filtration by integrating Delphi method (DM), interpretive structural modeling (ISM), and cross-impact matrix multiplication applied to classification (MICMAC). Our results highlighted that lack of enforceable laws regarding returned goods and recycled products, lack of rules and regulations for green practices, and lack of collaboration with government and environmental institutions are most critical barriers. However, fear of failure about green innovation is least important barriers to green innovations adoption. This study offers interesting clues to promote green innovation in manufacturing industry.

Relying on tournament theory and environmental management research, we examine how CEO tournament incentives induce top executives to invest more in green innovation. Using a sample of Chinese listed companies from 2010 to 2016, we find evidence that CEO tournament incentives are positively associated with green innovation. In addition, we find that a positive relationship between CEO tournament incentives and green innovation is stronger in state-owned enterprises than in non-state-owned enterprises. These results support tournament theory, which proposes that better incentives induce top executives’ efforts to win the tournament incentives, and such efforts are subject to fiercer competition among employees, which improves firms’ social and financial performance. Moreover, our findings have implications for policy makers and regulators who wish to enhance environmental legitimacy by providing tournament incentives to top executives.

Despite a direct ban on charging interest, interest-based benchmarks are used as a pricing reference by a majority of Islamic banks, due in part to the absence of stable and widely- published alternatives. Benchmarking interest rate exposes Islamic banks to the problems of conventional banks, particularly the interest rate risk. Against this backdrop, the present study empirically examines the dynamic linkage between the interest rate volatility and the financing of Islamic banks. The empirical analysis is carried using evidence from the Islamic banking industry of Pakistan during the time period 2006–2020. The multivariate Johansen and Jusiles Co-integration test and Vector Error Correction Model (VECM) are used as the baseline econometric models. Moreover, the DCC-GARCH model is employed for robustness and ensuring the consistency of results. The results indicate that a significant long-term and short-term relationship exists between the interest rate volatility and the financing of Islamic banking industry providing significant evidence for co-movements and convergence. These findings suggest that paradoxical as it may seem, the financing of Islamic banks operating within a dual banking system is subject to interest rate risk, mainly due to benchmarking interest rate, which in-turn makes Islamic banks vulnerable to the rate of return risk and withdrawal risk. Moreover, corporate financing, in particular, is more vulnerable to interest rate risk.

Current research in the field of environmental management has placed significant emphasis on understanding the reasons behind varying organizational responses to environmental responsibilities. Governance scholars emphasize the central role of institutional factors in shaping environmental responsibilities, primarily due to the substantial influence exerted by regulatory institutions. Drawing on institutional theory, we investigate how sub-national institutional factors impact a firm's green investment intensity and explore their moderating influence on the relationship between green investment and a firm's financial performance. Using a database of Chinese listed companies from 2012 to 2019, this study employs fixed effect model as a baseline regression. Our analysis demonstrates that sub-national institutions, such as state-owned enterprises (SOEs), regional development, and cross-listing, have significant and positive impact on corporate green investment. Our study further provide an evidence that green investment significantly improve firms' financial performance. Moreover, the positive effect of green investment on financial performance is stronger in SOEs and in firms of developed regions as compared to their counterparts, and weaker in cross listed firms than those of non-cross listed peers. Our study suggest that subnational institutions play an imperative role in improving environmental quality and financial performance by promoting corporate green investment. To make sure that our findings remain robust to endogeneity, we applied generalized method of moments (GMM) and propensity score matching (PSM) method. Our findings further provide implications for emerging economies with similar shareholding patterns and unbalanced regional development.

Stakeholder management researchers have recently put a lot of effort into figuring out why organizations facing extensive pressure respond differently to social responsibilities. In particular, ethics researchers believe that senior management must drive corporate social responsibility since their attitudes toward such issues are so important. In line with this sentiment, our study develops a framework of management power, composed of CEOs’ power and the organizations’ power, and explores how managerial power heterogeneity affects the corporate social responsibility (CSR) performance of a firm. Using sample data from the largest emerging market—China—for the period 2010–2018, we submit that CEOs with structural power and shareholders with the highest concentration tend to show a lower commitment to CSR activities. On the other hand, we recognize that the ownership, expertise, and prestige power of CEOs’, the supervision, monitoring, and political power of the board can improve a firms’ CSR performance. These results are also validated by using a fixed effect model, two stage least square (2-SLS) regression, and the propensity score matching (PSM) technique. Our results imply that the implementation of social policies fundamentally results not only from powerful CEOs, but also from powerful boards and shareholders. Moreover, our study provides useful implications with regard to the social outcomes of power authorized by CEOs and the organizations.

Purpose: The financial policies of the modern world corporations and their investment decisions are generally considered as interrelated because the agency problems, associated with the debt level and its maturity structure, give rise to incentives for overinvestment or underinvestment. The present study empirically investigates the linkage between debt maturity structure and firm investment in a financially constrained environment, using Pakistan as a case study, to determine how the institutional environment in which firms operate affect these decisions and their linkage.Design/methodology/approach: The empirical analysis is carried in a panel data setting using panel regression models as the baseline methods. Moreover, generalized methods of moments (GMM) estimators are used, coupled with the instrumental variables approach, for robustness and improving the efficiency and consistency of estimates.Findings: Results suggest that firms rely more on short financing in Pakistan. Thus, given the capital structure which is characterized by higher proportion of short-term financing, the higher level of leverage is less likely to cause underinvestment problem. However, the underinvestment problem do persists in the firms that have higher portion of long-term debt. These findings imply that the debt-overhang problem may persist even in the financially constrained environments where attractive investment opportunities are limited, and long-term financing is difficult to acquire.Originality/value: This study contributes to the literature by revealing how corporate investment and financing decisions and their linkage is influenced by the institutional environment of the less developed countries which is characterized by underdeveloped financial markets, inefficient legal system and weak investor protection system.