Doing well by doing good: How corporate environmental responsibility influences corporate financial performance

2020 ◽  
Author(s):  
Yuanyuan Zhang ◽  
Zhe Ouyang
Keyword(s):  
Financial Performance ◽  
Environmental Responsibility ◽  
Corporate Financial Performance ◽  
Corporate Environmental Responsibility

scholarly journals Impact of Corporate Environmental Responsibility on Firm’s Financial Performance: Moderating Role of Organizational Slack and Industry Competition

2022 ◽  
Vol 8 (2) ◽  
pp. 76-92
Author(s):  
Muhammad Amir ◽  
Naveed Iqbal ◽  
Sheeza Tahir
Keyword(s):  
Financial Performance ◽  
Moderating Effect ◽  
Annual Reports ◽  
Environmental Responsibility ◽  
Corporate Financial Performance ◽  
Organizational Slack ◽  
Corporate Environmental Responsibility ◽  
Industry Competition ◽  
Data Validity

Due to speedy trade and industry expansion in the emerging economies it is creating stern environmental corrosion. Effluence makers’ enterprises are mostly responsible for environmental deterioration. Therefore, it is the responsibility of those firms to take steps to control this corrosion in the environment. This research explains the effect of corporate environmental responsibility (CER) on corporate financial performance (CFP) with the moderating effect of organizational slack and industry competition. Data was collected from annual reports of 50 KSE 100 index companies from 2012-2019, containing total 450 observations. Dynamic penal model was used to test the study hypothesis by using Eviews, different pre and post estimations are applied to confirm the data validity.  Empirical results indicate that corporate environmental responsibility has significant positive effect on corporate financial performance, while the moderating effect of organizational slack is negative. Industry competition has significant positive moderating effect on the relationship, i.e., if there is high competition in industry then firms will invest more in environment to attract more consumers and to create good will in market. The study reveal that those firms will lead where competition is high and who will focus on their responsibility towards environment.

Corporate environmental responsibility and financial performance: does bidirectional causality work? Empirical evidence from the manufacturing industry

2017 ◽  
Vol 13 (2) ◽  
pp. 221-234 ◽  
Author(s):  
Mario Testa ◽  
Antonio D’Amato
Keyword(s):  
Financial Performance ◽  
Manufacturing Industry ◽  
Environmental Responsibility ◽  
Economic Evaluations ◽  
Corporate Environmental Responsibility ◽  
Content Type ◽  
Environmental Commitment ◽  
Panel Data Regression ◽  
External Pressures ◽  
Italian Manufacturing Firms

Purpose Over the past two decades, scholarly attention has focused mainly on a direct and inverse relationship between corporate environmental responsibility (CER) and corporate financial performance (CFP). This study aims to explore the bidirectional causality hypothesis, as good environmental results can lead to good financial results, which makes it possible to invest more resources in projects that improve environmental performance. Design/methodology/approach The authors test the bidirectional causality between CER and CFP on a sample of listed Italian manufacturing firms over the 2005-2014 period. The authors use a fixed effect panel data regression and check the robustness of the results with alternative econometric techniques. Findings Although the findings do not support bidirectional hypothesis, they establish direction/causality from CFP to CER. As a result, environmental responsibility is a consequence of prior financial performance, which supports the slack resources hypothesis. Research limitations/implications Given that companies’ environmental commitment is dictated by economic evaluations or by assessing the availability of resources to invest, it seems that the spread of environmentally responsible behaviours might be supported by different external pressures. Originality/value The paper provides further insights on sustainability management literature by establishing a bidirectional relationship between firm performance and environmental responsibility.

scholarly journals Does corporate environmental responsibility affect investor future goal in the energy sector firms?

2021 ◽  
Vol 905 (1) ◽  
pp. 012140
Author(s):  
A Setyowati ◽  
N H Purnomowati ◽  
D N Sari ◽  
E S Ramadhan
Keyword(s):  
Financial Performance ◽  
Stakeholder Theory ◽  
Energy Sector ◽  
Environmental Responsibility ◽  
Corporate Environmental Responsibility ◽  
Environmental Initiatives ◽  
The Relationship ◽  
Sample Set

Abstract This study investigates the relationship between corporate environmental responsibility and firm’s financial performance by using a sample set of 2,241 firm-year observations representing 470 unique energy firms from 30 countries from 2013–2020. Supporting stakeholder theory, we find that firms with better environmental responsibility actions are associated with higher Tobins’q, suggesting that the investors react positively to the firm’s environmental initiatives. Overall, our findings suggest that firms in the energy sector should pay attention to corporate environmental responsibility practices to obtain a good response from the investors and achieve the firm’s long-term financial goals.

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