CORPORATE SUSTAINABILITY AND ENVIRONMENTAL DISASTERS: A CASE OF THE 2011 THAI FLOODS

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Abstract

Manufacturing companies suffered from the floods that happened in 2011 and left many companies in the financial fragile situation. This research examines whether the Thai floods of 2011 had differential effects among variously sized businesses, as well as among Thai, Japanese and other foreign companies. Financial records were gathered from 514 companies out of an initial 651 from seven industrial estates in Thailand affected by the floods. This research collects quantitative data to verify that disasters have differing effects on different types of companies. Comparisons were made among the various types of companies from years 2011 through 2015 on: Return on Assets (ROA), Return on Equity (ROE), Gross Profit Margins (GPM), Operating Profit Margins (OPM), and Net Profit Margins (NPM), using Kruskal-Wallis ANOVA, and Dunn’s post-hoc tests. Significant differences were found among the various sizes on companies in most of the five measures in most years, especially 2011-2013. Similar, but smaller differences were found among companies of different nationalities. The study suggests ways in which companies and government agencies may work together to mitigate the effects of future disasters.

Keywords: Corporate Sustainability, Natural Disaster, Floods, Corporate Governance, Government Policy, Sizes, Ownership

JEL Classification: G32, G34, Q54, Q56, Q58

Received: 22.01.2018

Accepted: 28.03.2018

Published online: 30.03.2018

How to cite this paper: Terdpaopong, K., Zepp, R. A., & Manapreechadeelert, P. (2018). Corporate sustainability and environmental disasters: A case of the 2011 Thai floods. Corporate Ownership & Control, 15(3), 125-137. https://doi.org/10.22495/cocv15i3art11