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Non-economic Performance of Benefit Corporations: A Variance Decomposition Approach

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Abstract

Drawing on evolutionary realism as a guiding framework and using relevant theoretical bases at macro- (country-), meso- (industry-), and micro- (firm-) levels, we investigate the relative variance explained by each level on selection (non-economic performance) and retention (decertification) of Benefit Corporations (B-Corps). Based on a sample of 5052 observations of certified B-Corps and 1403 observations of decertified B-Corps, relative to the country and industry differences, firm-level differences explain most of the variance in non-economic performance, especially for workers and community impact areas. Industry-level differences explain small differences in customers and environmental performance while country differences do not explain meaningful performance differences. The results also show a similar pattern in relative effects for decertified B-Corps. Our findings point to the value of disaggregating the relative effects of multilevel factors in further understanding drivers of non-economic performance and the decertification of B-Corps.

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Notes

  1. Source: https://bcorporation.net/about-b-corps.

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    1. Villanova School of Business, Villanova University, 800 Lancaster Ave, Villanova, PA, 19085, USA

      Pankaj C. Patel

    2. College of Business, Stony Brook University, 258 Harriman Hall, Stony Brook, NY, 11794, USA

      C. S. Richard Chan

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    Appendix

    Appendix

    See Tables 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14.

    Table 5 Variance decomposition analysis results (winsorized continuous DVs)
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    Table 6 Variance decomposition analysis results (alternative nested structure)
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    Table 7 Variance decomposition analysis results (firm size-fixed effect)
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    Table 8 Variance decomposition analysis results (country fixed effect)
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    Table 9 Variance decomposition analysis results (industry fixed effect)
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    Table 10 MLE variance decomposition analysis results (replacing country with national business systems)
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    Table 11 REMLE variance decomposition analysis results
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    Table 12 REMLE variance decomposition analysis results with covariance between firms and industries
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    Table 13 Comparison of VDA results
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    Table 14 Exact items in the environment impact area
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    Patel, P.C., Chan, C.S.R. Non-economic Performance of Benefit Corporations: A Variance Decomposition Approach. J Bus Ethics 178, 355–376 (2022). https://doi.org/10.1007/s10551-021-04754-y

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