How Sustainability Drives Market Share: the Mediating Effect of Financial Performance in Emerging Markets

Abstract

Purpose: This study investigates the mediating role of financial performance in the relationship between sustainability and market share among companies listed on the Iraq Stock Exchange during 2010 and 2022.

 Method: Using data from 35 companies and 455 observations, the research employs Global Reporting Initiative (GRI) indicators to measure sustainability, and applies panel data regression analysis across three models.

Finding: The findings reveal a positive and statistically significant relationship between sustainability and market share, and identify return on assets (ROA) as a key mediator in this relationship. The finding confirms that sustainability positively affects market share, while financial performance mediates this effect.

Research, Practical & Social Implication: These results suggest that companies with strong sustainability practices experience improved financial outcomes, which in turn enhance their competitive advantage. The research highlights the importance of sustainability reporting in strategic decision-making and recommends further investigation across different industries and financial metrics.

Contribution: the study contributes to understanding how sustainable development can drive both financial success and market competitiveness.