The Industrial Revolution 4.0, Societal Well-Being and Firms Performance among Malaysian Listed Companies

Abstract

In today's competitive economic landscape, companies around the world face mounting pressure to innovate and incorporate cutting-edge technology, particularly Industry 4.0 (IR4), into their operations. As a result, investing in the development and adoption of advanced IR4 technology has become increasingly crucial for businesses looking to remain competitive. Additionally, there is growing demand for companies to prioritize their responsibilities to society, including improving their workforce, upholding human rights, supporting local communities, and ensuring product safety and reliability. In light of these factors, it is important to investigate the relationship between a company's commitment to Industry 4.0 (IR 4.0) and societal well-being with the overall firm performance. This study examines a sample of 309 firm-year observations from publicly listed companies in Malaysia between 2010 and 2018, utilizing data from the Refinitiv database and employing multiple regression analysis. The results of the study demonstrate a positive association between a company's commitment to IR 4.0 and societal well-being with its overall firm performance. Further analysis also shows that individual components of social scores, such as workforce, human rights, community, and product responsibility, have a positive impact on firm performance. The findings of this study offer valuable insights to investors and policymakers, suggesting that a company's commitment to adopting digital technology and promoting societal well-being can lead to improved performance.