Purpose: Employing a large sample consisting of 3,701 corporations domiciled in developed and emerging countries, this paper aims to analyze the mediating role of investment efficiency in the association between business sustainability performance and corporate financial performance.Design/methodology/approach: Four different aspects of corporate sustainability offered by the ASSET4 database are used as proxies for business sustainability performance, including economic, corporate governance, social and environmental dimensions. In addition to these aspects, the aggregate measure of business sustainability performance is also employed. In order to test the association between business sustainability and corporate performance via investment efficiency, ordinary least squares, fixed-effect, random-effect and generalized method of moments statistical models were employed.Findings: The results suggest that business sustainability performance is positively associated with corporate financial performance, indicating that sustainable corporations enjoy higher financial performance. Moreover, Sobel, Aroian and Goodman tests confirm that investment efficiency mediates the positive relationship between business sustainability performance and financial performance. Finally, further analyses show that the positive association between sustainability performance and investment efficiency is stronger for those firms headquartered in developed countries than in those located in emerging nations.Originality/value: This paper contributes to the literature by investigating how growth opportunities advance the influence of business sustainability to corporate financial performance using a large sample from 43 countries.

The article investigates the relationship between earning volatility and capital structure and in particular, aims to contribute to prior research by examining the moderating role of financial distress on the relationship between earning volatility and capital structure. Thus, we employ a MIMIC model of Structural Equations Modeling (SEM) approach to examine the associations, which enables us to measure the earning volatility and capital structure by a few best indicators. Using 902 firm-year observations listed in the Tehran Stock Exchange (TSE) from 2006 to 2017, we find that earning volatility has a significant and negative impact on capital structure. In addition, the results indicate that financial distress significantly affects the relationship between earning volatility and capital structure. In short, when financial distress acts as a moderating variable, the relationship between earning volatility and capital structure is weaker than the time when there is no such variable.