The Effect of Sanctions on Corporate Sustainability Reporting in the Framework of Game Theory (Generalization of the Stagelberg Game Model)

Document Type : Original Article

Authors
مهرداد شفیعی 1
Fatemeh Sarraf 2
Zohreh Hajiha 3
1 Ph.D. Candidate in Accounting, Faculty of Management and Accounting, Islamic Azad University, South Tehran Branch
2 Associate Prof. Department of Accounting, ST.C., Islamic Azad University, Tehran, Iran
3 Prof. Department of Accounting, ST.C., Islamic Azad University, Tehran, Iran
10.22034/jmaak.2026.24343
Abstract
Nowadays, the role of economic conditions and external constraints of the organization in shaping the behavior of firms and reporting patterns has received more and more attention from researchers. In this regard, the aim of the present study is to analyze the effect of sanctions as an important external constraint on corporate sustainability reporting using the game theory framework. This study is of an applied type and its data was collected from the financial statements of the companies and a questionnaire. To estimate the model, the opinions of 31 experts in the field of accounting and auditing were used and approaches based on deep learning algorithms were used in the deep layers of analysis. The research findings showed that the intensity of competition has a positive effect on the profitability of the leader firm and the follower firms, with the difference that this effect is stronger in the leader firm. Also, spillovers reduce the profitability of the leader firm and increase the profitability of the follower firms. The results showed that sustainability reporting also increases the profitability of both leader and follower firms, and its effect on the leader firm is more noticeable; which can strengthen the leader's motivation to enter this field more actively. Examining the role of sanctions revealed that sanctions cause a significant decrease in the profitability of leader and follower firms, and the intensity of this effect is more significant in smaller firms. Also, increasing the leader's bargaining power leads to a serious decrease in the profits from sustainability reporting in follower firms; while increasing the follower's bargaining power, although reducing the leader's profits, this decrease is not very significant compared to the increase in the followers' profits.
Keywords
Sustainability
Game Theory
Stagelberg
Leader-Follower
Sanction
Bargaining
  1. احمدرضا، یونس، مران جوری، مهدی، علی خانی، رضیه، تقی پوریان، یوسف. (1401). ارائه چارچوب گزارش‌گری پایداری مبتنی بر ایجاد توازن بین انتظارات ذینفعان و ظرفیت‌های شرکت. پژوهش‌های حسابداری مالی و حسابرسی (پژوهشنامه حسابداری مالی و حسابرسی)، 14(56)، 161-190.
  2. اخترشناس، داریوش، خدامی پور، احمد، پورحیدری، امید. (1399). تدوین مدل عوامل مؤثر بر پایداری شرکتی در ایران. مطالعات تجربی حسابداری مالی، 17(65)، 175-201.
  3. برگ بید، احمد، جعفری، علی، صالح نژاد، سید حسن. (1400). ارائه الگوی ترکیبی سه ‌بعدی (مالی، اقتصادی، پایداری)، در پیش‌بینی درماندگی مالی شرکت‌ها، پژوهش‌های حسابداری مالی و حسابرسی، دوره 13، شماره 51، 105-132.
  4. پورخانی ذاکله بری مظفر، جهانشاد آزیتا، حیدرپور فرزانه. ارائه الگویی برای افشاء اطلاعات پایداری شرکتی و ارزیابی اثرعوامل مرتبط با تئوری علامت‌دهی و ذینفعان بر گزارش‌گری این اطلاعات. دو فصلنامه حسابداری ارزشی و رفتاری. ۱۳۹۹; ۵ (۱۰)، ۳۸۵-۴۲۱.
  5. حساس یگانه، یحیی، جعفر باباجانی، محمد تقی تقوی فرد و آرش آرین پور، (۱۳۹۷)، تحلیل عملکرد پایدار زیست‌محیطی و تأثیر آن بر هزینه سرمایه شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران، حسابداری ارزشی و رفتاری، 3(5)، ۳۹-۱.
  6. خلیلی، محمد، ذبیحی، علی، فغانی ماکرانی، خسرو. (1403). تبیین مدلی برای تأثیر فرهنگ سازمانی و عوامل اقتضایی بر گزارش‌گری پایداری با رویکرد عملکرد اقتصادی (GRI201). دانش حسابداری و حسابرسی مدیریت، 13(50)، 319-338.
  7. خلیلی، یاسمن، کبیری، محمدتقی، حیدری رستمی، کرامت الله، مومنی یانسری، ابوالفضل، (1404)، واکاوی نقش گزارش‌گری پایداری در تصمیمات سرمایه‌گذاری مدیران، قضاوت و تصمیم‌گیری در حسابداری، 13 (4)، 135-162.
  8. دوستیان، رحمان و رضایی، غزل . (1404). بررسی رابطه بین افشای گزارش‌گری پایداری و عملکرد IPO. دانش سرمایه‌گذاری، 14(56)، 546-527.
  9. رحمانی، محمد، کاشانی پور, محمد، فتحی، محمد رضا، فرجی، امید. (1402). تبیین پیشران‌های موثر بر آینده گزارش‌گری پایداری. صنعت لاستیک ایران، 27(110)، 78-91.
  10. رمضانپور, اسماعیل , زمانی, نرجس و رضائی پیته نوئی, یاسر . (1403). تحریم‌های اقتصادی و مدیریت نقدینگی در شرکت‌ها. توسعه و سرمایه, 9(1), 83-99. doi: 10.22103/jdc.2023.21005.1355
  11. فاطری، علی و مشایخی، بیتا و حجازی، رضوان، (1402)، رتبه بندی ابعاد و شاخص‌های گزارش‌گری پایداری در شهرداری‌ها، فصلنامه حسابداری و منافع اجتماعی، دوره: ۱۳ (۱)، 34-17.
  12. محمدی سارا، نداف مهدی، شیخ قلاوند فرشته. (۱۴۰۲)، طراحی مدل پایداری سازمانی با رویکرد نظریه داده‌بنیاد (موردمطالعه: شرکت‌های پتروشیمی مستقر در منطقه ویژه اقتصادی ماهشهر). پژوهش‌های مدیریت منابع سازمانی، ۱۳ (۱)، ۱۵۵-۱۷۹.
  13. یوسفی زاده, سحر و فخاری, حسین . (1403). ویژگی های شرکتی تعیین کننده گزارشگری پایداری. پژوهش های تجربی حسابداری, 14(4), 149-184. doi: 10.22051/jera.2024.47392.3254

 

  1. Abdelfattah, T., Elmahgoub, M., & Elamer, A. A. (2020). Female audit partners and extended audit reporting: UK evidence. Journal of Business Ethics., 174, 177–197.
  2. Afesorgbor, Sylvanus Kwaku, (2019). The impact of economic sanctions on international trade: How do threatened sanctions compare with imposed sanctions?, European Journal of Political Economy, Elsevier, 56(C), 11-26.
  3. Ahn. K. Choi. M. Y, Dai. B, Sohn. S, Yang. B. (2018). Modeling stock return distributions with a quantum harmonic oscillator, EPL (Europhysics Letters).
  4. Akbar E. Torbat, (2005). Impacts of the US Trade and Financial Sanctions on Iran," The World Economy, Wiley Blackwell, 28(3), 407-434.
  5. Amin, H., Kadri, M. H., & Raja Ahmad, R. A. (2024). The Influence of Sustainability Reporting in Enhancing Firm Value. Information Management and Business Review, 16(3(I), 257-266. https://doi.org/10.22610/imbr.v16i3(I).3803
  6. Avramov, Doron & Cheng, Si & Lioui, Abraham & Tarelli, Andrea, (2022). Sustainable investing with ESG rating uncertainty, Journal of Financial Economics, Elsevier, 145(2), 642-664.
  7. Boulhaga, M., Bouri, A., Elamer, A. A., & Ibrahim, B. A. (2023). Environmental, social and governance ratings and firm performance: The moderating role of internal control quality. Corporate Social Responsibility and Environmental Management, 30(1), 134–145.
  8. Conrad, K., (2005). Price competition and product differentiation when consumers care for the environment. Environ. Resour. Econ. 31, 1–19.
  9. Deegan, C. (2014). An overview of legitimacy theory as applied within the social and environmental accounting literature. Sustainability Accounting and Accountability, 2, 248–272.
  10. Donaldson, T., Preston, L., (1995). Stakeholder theory of the corporation – concepts evidence and implications. Acad. Manag. Rev. 20 (1), 65–91.
  11. Dowling, J., & Pfeffer, J. (1975). Organizational legitimacy: Social values and organizational behavior. Pacific Sociological Review, 18(1), 122–136.
  12. Dursun Peksen & A. Cooper Drury, (2010). Coercive or Corrosive: The Negative Impact of Economic Sanctions on Democracy, International Interactions, Taylor & Francis Journals, 36(3), 240-264.
  13. Elkhan Richard Sadik-Zada & Andrea Gatto & Luigi Aldieri & Giovanna Bimonte & Luigi Senatore & Concetto Paolo Vinci, (2024). "Game Theory Applications to Socio-Environmental Studies, Development Economics, and Sustainability Research," Games, MDPI, vol. 15(1), pages 1-4, January.
  14. Felbermayr, Gabriel & Kirilakha, Aleksandra & Syropoulos, Constantinos & Yalcin, Erdal & Yotov, Yoto V., (2020). The global sanctions data base, European Economic Review, Elsevier, vol. 129(C).
  15. Ferrier, W.J., Smith, K.G., Grimm, C., (1999). The role of competitive action in market share erosion and industry dethronement: a study of industry leaders and challengers. Acad. Manag. J. 42 (4), 372–388.
  16. Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman/Ballinger (Harper Collins).
  17. Freeman, R. E., Wicks, A. C., & Parmar, B. (2004). Stakeholder theory and the corporate objective revisited. Organization Science, 15(3), 364–369.
  18. Gardberg, N. A., & Fombrun, C. J. (2006). Corporate citizenship: Creating intangible assets across institutional environments. Academy of Management Review, 31(2), 329–346.
  19. Ghosh, S., Raut, R.D., Cheikhrouhou, N., Sinha, S., Ray, A., (2024). Attaining sustainable development goals through embedding circular economy principles: evidence from food processing small-and medium-sized enterprises in India. Bus. Strat. Environ. 33 (3), 2193–2224.
  20. Glen Biglaiser & David Lektzian, (2020). The effects of economic sanctions on targeted countries’ stock markets, International Interactions, Taylor & Francis Journals, vol. 46(4), pages 526-550, July.
  21. Guerrero-Baena, M.D., Castilla-Polo, F., Rodríguez-Guti´errez, P., (2024). Motivations for social and environmental reporting in Spanish SMEs: an inductive content analysis. Bus. Strat. Environ.
  22. Hall, J., Wagner, M., (2012). Integrating sustainability into firms' processes: performance effects and the moderating role of business models and innovation. Bus. Strateg.Environ. 21, 183–196.
  23. Hassan, A., Adhikariparajuli, M., Fletcher, M., & Elamer, A. (2019). Integrated reporting in UK higher education institutions. Sustainability Accounting, Management and Policy Journal, 10(5), 844–876.
  24. Hassan, A., Elamer, A. A., Fletcher, M., & Sobhan, N. (2020). Voluntary assurance of sustainability reporting: Evidence from an emerging economy. Accounting Research Journal, 33(2), 391–410.
  25. Hassan, A., Elamer, A. A., Lodh, S., Roberts, L., & Nandy, M. (2021). The future of nonfinancial businesses reporting: Learning from the Covid-19 pandemic. Corporate Social Responsibility and Environmental Management, 28(4), 1231–1240.
  26. Hassanein, A., Bani-Mustafa, A. & Nimer, K. (2024). A country’s culture and reporting of sustainability practices in energy industries: does a corporate sustainability committee matter?. Humanit Soc Sci Commun 11, 1140 https://doi.org/10.1057/s41599-024-03536-x
  27. Heydarian, Samira & Pahlavani, Mosayeb & Mirjalili, Seyed Hossein, (2021). Financial Sanctions and Economic Growth: An Intervention Time-series Approach, EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, 51(1), 1-14.
  28. Hitchcock, D.E., Willard, M.L., (2009). The Business Guide to Sustainability: Practical Strategies and Tools for Organizations, second ed. Routledge, London, pp. 59–78.
  29. Hofer, C., Cantor, D.E., Dai, J., (2012). The competitive determinants of a firm's environmental management activities: evidence from US manufacturing industries. J. Oper. Manag. 30, 69–84.
  30. Hosseini, S. A., & Babaei, F. (2023). A Model for Identifying Key Elements of Corporate Sustainability Reporting: Emphasizing Islamic Principles and Values. Accounting and Auditing Review, 30(4), 684-724. doi: 10.22059/acctgrev.2023.360038.1008818
  31. Huck, S., Muller, W., Normann, H.T., (2001). Stackelberg beats Cournot: on collusion and efficiency in experimental markets. Econ. J. 111 (474), 749–765.
  32. Itay Goldstein & Alexandr Kopytov & Lin Shen & Haotian Xiang, (2022). On ESG Investing: Heterogeneous Preferences, Information, and Asset Prices, NBER Working Papers 29839, National Bureau of Economic Research, Inc.
  33. Jacobs, B.W., Subramanian, R., (2012). Sharing responsibility for product recovery across the supply chain. Prod. Oper. Manag. 21 (1), 85–100.
  34. Khan A, Afeef M, Ilyas M, Jan S, (2023). Does CSR committee drive the association between corporate social responsibility and firm performance? International evidence. Manag Financ 50(1):50–74
  35. Khatib, S. F. A., Abdullah, D. F., Elamer, A. A., & Abueid, R. (2021). Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions. Business Strategy and the Environment, 30(2), 985–1002.
  36. Khatib, S. F. A., Abdullah, D. F., Elamer, A., Yahaya, I. S., & Owusu, A. (2021). Global trends in board diversity research: A bibliometric view. Meditari Accountancy Research, 31(2), 441–469.
  37. Kondala, M., Nudurupati, S.S., Pappu, R.P., (2024). The challenges in adoption of circular economy in SMEs–a research agenda and way forward. Benchmark Int. J. 31 (5), 1667–1699.
  38. Kopel, M., Lamantia, F., Szidarovszky, F., (2014). Evolutionary competition in a mixed market with socially concerned firms. J. Econ. Dyn. Control 48, 394–409.
  39. Li, Y., Richardson, G.D., Thornton, D.B., (1997). Corporate disclosure of environmental liability information: theory and evidence. Contemp. Account. Res. 14 (3), 435–474.
  40. Lin, Y., Choo, W. C., & Ng, K. Y. (2024). Decoding Sustainability Reporting: Insights from Text Mining and Classification Models for SDGs. Journal of Lifestyle and SDGs Review, 5(1), e02768. https://doi.org/10.47172/2965-730X.SDGsReview.v5.n01.pe02768
  41. Liu, Xue-Ying & Zhao, Xin-Xin & Ma, Kun & Sharma, Susan Sunila, (2024). The impact of financial sanctions on ESG performance of target countries, Pacific-Basin Finance Journal, Elsevier, vol. 87(C).
  42. Liu, Z., Anderson, T.D., Cruz, J.M., (2012). Consumer environmental awareness and competition in two-stage supply chains. Eur. J. Oper. Res. 218, 602–613.
  43. Manasakis, C., Mitrokostas, E., Petrakis, E., (2014). Strategic corporate social responsibility activities and corporate governance in imperfectly competitive markets. Manag. Decis. Econ. 35, 460–473.
  44. Marco Cipriani & Linda S. Goldberg & Gabriele La Spada, (2023). Financial Sanctions, SWIFT, and the Architecture of the International Payment System, Journal of Economic Perspectives, American Economic Association, 37(1), 31-52.
  45. Masila, C. K., Nyamute, W., Okiro, K., & Irungu, M. (2024). Does Corporate Sustainability Reporting Influence Financial Performance? Evidence from Kenyan Listed Companies. European Journal of Business and Management Research, 9(1), 79–84. https://doi.org/10.24018/ejbmr.2024.9.1.2270
  46. Matisoff, D., (2015). Sources of specification errors in the assessment of voluntary environmental programs: understanding program impacts. Pol. Sci. 48, 109–126.
  47. Matthias Efing & Stefan Goldbach & Volker Nitsch & Manju Puri, (2023). Freeze! Financial Sanctions and Bank Responses, The Review of Financial Studies, Society for Financial Studies, 36(11), 4417-4459.
  48. Matthias Neuenkirch & Florian Neumeier, (2015). The Impact of UN and US Economic Sanctions on GDP Growth, FIW Working Paper series 138, FIW.
  49. Mayra G. Gonzalez-Ramirez, Pablo T. Rodriguez-Gonzalez, (2024), Game theory in sustainable decision-making: A new acetic acid plant as a case study, Journal of Cleaner Production, Volume 321, 25 October 2021, 128962
  50. McWilliams, A., Siegel, D.S., Wright, M., (2001). Corporate social responsibility: a theory from the firm perspective. Acad. Manag. Rev. 26 (1), 117–127.
  51. McWilliams, A., Siegel, D.S., Wright, M., (2006). Corporate social responsibility: strategic implications. J. Manag. Stud. 43 (1), 1–18.
  52. Mendoza, A.J., Clemen, R.T., (2013). Outsourcing sustainability: a game theoretic modeling approach. Environment Systems and Decisions 33, 224–236.
  53. Mirzosaid Sultonov, (2020). The Impact of International Sanctions on Russian Financial Markets, Economies, MDPI, 8(4), 1-14.
  54. Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886.
  55. Mohammad Abweny & Rizwan Ahmed & Chonlakan Benjasak & Dung T. K. Nguyen, (2025). The Influence of Sanctions on Corporate Reporting Behaviour: International Evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., 30(3), 3322-3339.
  56. Moraga-González, J.L., Padrón-Fumero, N., (2002). The adverse effects of environmental policy in green markets. Environ. Resour. Econ. 22 (3), 419–447.
  57. Neuenkirch, Matthias & Neumeier, Florian, (2015). The impact of UN and US economic sanctions on GDP growth, European Journal of Political Economy, Elsevier, vol. 40(PA), pages 110-125.
  58. Neuenkirch, Matthias & Neumeier, Florian, (2016). The impact of US sanctions on poverty, Journal of Development Economics, Elsevier, 121(C), 110-119.
  59. Păun, Ana Petrina, Codruța Cornelia Dura, Sorin Mihăilescu, Roland Iosif Moraru, and Claudia Adriana Isac. (2020). OHS Disclosures Within Non-Financial Reports: The Romanian Case, Sustainability 12, no. 5: 1963. https://doi.org/10.3390/su12051963
  60. Pham, H. S. T., & Tran, H. T. (2020). CSR disclosure and firm performance: The mediating role of corporate reputation and moderating role of CEO integrity. Journal of Business Research, 120, 127–136.
  61. Piga, C., (2002). Corporate social responsibility: a theory of the firm perspective. A few comments and some suggestions. Acad. Manag. Rev. 27, 13–15.
  62. Plambeck, E., Wang, Q., (2009). Effects of E-waste regulation on new product introduction. Manag. Sci. 55 (3), 333–347.
  63. Preston, L.E., O'Bannon, D., (1997). The corporate social-financial performance relationship. Bus. Soc. 36 (4), 419–429.
  64. Pyo, S., Chung, S.G., Ma, H.R., Oh, D.H., (2024). Firms for sustainable manufacturing: understanding the key determinants of pro-environmental behaviour. Sci. Technol. Soc. 29 (2), 262–281.
  65. Qiyuan Xu & Aizong Xiong, (2022). The impact of financial sanctions on the international monetary system, China Economic Journal, Taylor & Francis Journals, 15(3), 253-262, September.
  66. Ramazani yasuj, S. H. ., Jafari Dehkordi, H. R., & Banitalebi Dehkordi, B. . (2024). Futurology of Sustainable Environmental Reporting Models Considering Innovation Indicators. International Journal of Innovation Management and Organizational Behavior (IJIMOB), 4(3), 101-108. https://doi.org/10.61838/kman.ijimob.4.3.12
  67. Roberts, L., Hassan, A., Elamer, A., & Nandy, M. (2021). Biodiversity and extinction accounting for sustainable development: A systematic literature review and future research directions. Business Strategy and the Environment, 30(1), 705–720.
  68. Sabbaghia, M., Behdadb, S., Zhuanga, J., )2016(. Managing consumer behavior toward ontime return of the waste electrical and electronic equipment: a game theoretic approach.Int. J. Prod. Econ. 182, 545–563.
  69. Sadik-Zada, E. R., Gatto, A., Aldieri, L., Bimonte, G., Senatore, L., & Vinci, C. P. (2024). Game Theory Applications to Socio-Environmental Studies, Development Economics, and Sustainability Research. Games, 15(1), 5. https://doi.org/10.3390/g15010005
  70. Schoenherr, T., (2012). The role of environmental management in sustainable business development: a multi-country investigation. Int. J. Prod. Econ. 140 (1), 116–128.
  71. Schoenherr, T., Talluri, S., (2013). Environmental sustainability initiatives: a comparative analysis of plant efficiencies in europe and the U.S. Transactions on Engineering Management 60 (2), 353–365.
  72. Selmey, M. G., & Elamer, A. A. (2023). Economic policy uncertainty, renewable energy and environmental degradation: Evidence from Egypt. Environmental Science and Pollution Research, 30(20), 58603–58617.
  73. Sengupta, A., (2015). Competitive investment in clean technology and uninformed green consumers. J. Environ. Econ. Manag. 71, 125–141.
  74. Setyaningsih, S., Widjojo, R., Kelle, P., (2024). Challenges and opportunities in sustainability reporting: a focus on small and medium enterprises (SMEs). Cogent Business & Management 11 (1), 2298215.
  75. Surroca, J., Tribó, J. A., & Waddock, S. (2010). Corporate responsibility and financial performance: The role of intangible resources. Strategic Management Journal, 31(5), 463–490.
  76. Ullah, F., Jiang, P., Elamer, A. A., & Owusu, A. (2022). Environmental performance and corporate innovation in China: The moderating impact of firm ownership. Technological Forecasting and Social Change, 184, Article 121990.
  77. Ullah, F., Jiang, P., Mu, W., & Elamer, A. A. (2023). Rookie directors and corporate innovation: Evidence from Chinese listed firms. Applied Economics Letters. https:// doi.org/10.1080/13504851.2023.2209308
  78. Unruh, G., (2010). Can You Compete on Sustainability?. Harvard Business Review. https:// hbr.org/2010/03/can-you-compete-on-sustainabil, Accessed date: 9 March 2018.
  79. Wang, H., & Choi, J. (2013). A new look at the corporate social-financial performance relationship: The moderating roles of temporal and interdomain consistency in corporate social performance. Journal of Management, 39(2), 416–441.
  80. Xu, L., Wang, C., Li, H., (2017). Decision and coordination of low carbon supply chain considering technological spillover and environmental awareness. Sci. Rep. 7, 1–14.
  81. Yuan, L., Tao, X., Ramsey, T., Degefu, D. (2021). Simulating the principal-agent relationship between enterprise owners and professional managers using evolutionary game theory and system dynamic. Wiley-Hindawi, 3881254.