THE ROLE OF ENVIRONMENTAL COSTS ANALYSIS IN ACHIEVING SUSTAINABLE DEVELOPMENT: COMPETITIVE ADVANTAGE AS A MEDIATING VARIABLE

Abstract

This paper has attempted to investigate how much of the EC can be used to fulfill the SD requirements in its social, environmental, and economic dimensions, considering CA as the intervening variable. The data have been collected through the application of questionnaire to six persons in ten industrial companies listed in Iraq Stock Exchange. The selected companies were chosen considering their need to reflect the sustainability reporting effects in their disclosures, as well as their environmental impacts related to the purpose of the study. The EC have been measured based on the indicators like prevention, appraisal, internal failure, external failure and EC intensity. SD has been analyzed on its social, environmental, and economic dimensions. In addition, the CA has been investigated as an intervening variable on its cost, profitability, differentiation, productivity, market share, and differentiation dimensions. The research results have revealed the fact that the EC can play an important role to support the fulfillment of the SD requirements, showing statistical significant effects on its social, environmental, and economic dimensions. While the amount of these effects on each dimension was different, the most significant effect was found to be in the social dimension. Furthermore, the results showed that the CA can mediate the relationship between the EC and the SD requirements; this gives interesting managerial implications for the industrial companies. Considering the environmental context in which many challenges appear, for example in Iraq, the inclusion of CA into the relationship makes the positioning of the companies as companies fulfilling the requirements of sustainability more likely.