A Tale of Two Countries

Abstract

This study explores the effect of triple transformation—environmental, technological, and social initiatives—on business performance in the UK and France. The authors use panel data from 25 UK and 24 French firms (2005-2023) and employ panel quantile regression models to assess the impact of research and development expenses (RND), social pillar score (SPS), and environmental innovation score (ENIS) on return on assets (ROA). The results show SPS and ENIS negatively affect profitability, especially for more profitable firms, while RND shows no significant impact. Firm size positively influences profitability but diminishes among top performers. Triple transformation is crucial for sustainable growth, though it may pose short-term financial challenges for more profitable firms. Policymakers should consider supportive measures for firms adopting sustainability initiatives. This study provides empirical insights into the nuanced effects of triple transformation on profitability in different economic contexts.