Investigating the Effect of Ethical Climate on Financial Performance Through the Mediating Variable of Ethical Behavior

Mohammad Reza Behmanesh, Mahboubeh Fatemi

Attar Institute of Higher Education, Mashhad, Iran

Cite: Behmanesh, M.R., Fatemi M. Investigating the Effect of Ethical Climate on Financial Performance Through the Mediating Variable of Ethical Behavior. J. Digit. Art Humanit., 3(1), 19-28. https://doi.org/10.33847/2712-8148.3.1_3

Abstract. In the current competitive environment, financial performance plays a vital role in evaluating an entity, and ethical climate and ethical behavior are important variables that affect financial performance. Therefore, the present study aimed to explore the effect of ethical climate on financial performance mediated by ethical behavior. The present applied research is descriptive in type. The statistical population included 234 financial managers of Toos Industrial town in Mashhad-Iran, and 116 subjects were selected for the study using a random sampling method. To collect the required data, standard questionnaires of ethical climate, ethical behavior and financial performance were used and to analyze the findings, structural equation modeling (SEM) was used. The SEM results showed that the ethical climate has a positive and significant effect on financial performance and the strength of this effect is increased when mediated by ethical behavior.

Keywords: Ethical Climate, Ethical Behavior, Financial Performance.

Acknowledgments

The present authors thank all the financial managers of the companies operating in Toos Mashhad Industrial Town and the esteemed training management of Mashhad Industrial Towns Company who contributed greatly to this research.

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Published online 29.06.2022