Does primary stakeholder management improve competitiveness? A dynamic network non-parametric frontier approach

Abstract

This study examines whether positive primary stakeholder management is reflected in firm competitiveness. To conceptualize firm competitiveness, we follow a productivity perspective, in which technological and economic relationships between input consumption and output production are considered. Utilizing a three-stage dynamic network data envelopment analysis approach, we compute the Malmquist productivity index, which allows to examine the dynamics of the technology frontier and the levels of catch-up among a sample of international airlines observed between 2005 and 2019. We find that productivity, technological, and efficiency changes are enhanced by two dimensions of stakeholder management (i.e., employees and product/customer responsibility) that are socially required and capture economic and legal responsibilities. Dimensions of stakeholder management that are socially desired or expected (i.e., community, environment, and human rights) and are not directly related to operations or factors that create economic value, do not appear to play a significant role in improving airline productivity change.