Are sustainable firms more profitable during COVID-19? Recent global evidence of firms in developed and emerging economies

Purpose This paper investigates whether sustainability performance (SP) protects financial (FP) for firms in both developed and emerging economies during the COVID-19-induced economic downturn. Design/methodology/approach Using a recent sample of 34 countries between 2003 2021, authors employ ordinary least squares regressions, moderations Heckman two-step method to test hypotheses. Findings Firms with strong SP have higher FP upcoming year. During COVID-19 crisis 2020–2021, impact on is pronounced but not economies. Furthermore, cross-listings expose high-standard institutional mechanisms Thus, sustainable cross-listed European stock exchanges are more profitable. Practical implications For regulators standard setters, global-level comparative analysis helps them find solutions that may assist improving globally (e.g. mandatory reporting) enduring crises resiliently. investors, study reveals relatively different risk practitioners private sector firms, this contributes dialogue what makes resilient COVID-19. Although might be temporary, lessons learned could protect from future crises. Originality/value The contribute contingency perspective by providing empirical evidence global setting pandemic. demonstrate how external (rule-based governance relation-based governance) cross-listing affect SP-FP relationship crisis. extend knowledge management literature fill research gap affects compared