How Does Environmental Performance Contribute to Firm Financial Performance in a Multi-country Study? Mediating Role of Competitive Advantage and Moderating Role of Voluntary Environmental Initiatives

IF 4 3区经济学 Q1 ECONOMICS

Journal of the Knowledge Economy Pub Date : 2024-07-12 DOI:10.1007/s13132-024-02193-4

Aamir Azeem, Muhammad Akram Naseem, Rizwan Ali, Shahid Ali

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Abstract

This study comprehensively investigates when and how environmental performance impacts financial performance in a multi-country sample. This study applies GMM by using a panel of 161 Climate Action 100 + companies from 34 countries encompassing 2015 to 2021. Our analysis shows that firms’ environmental performance positively contributes to financial performance, and results are robust to the alternative measures. The results show that competitive advantage mediates the relationship between environmental performance and financial performance. Similarly, voluntary environmental regulation adoption contextually and environmental management positively moderate the relationship and reduce the negative impact of pollution on financial performance. We conclude that firms should move from Friedman’s profit maximization philosophy towards Hart’s natural-resource-based view of pollution prevention and product stewardship for securing sustainable financial performance. Our findings have significant implications for managers, companies, and policymakers who are concerned with business operations, environmental performance, and carbon emissions mitigation strategies.

Graphical Abstract

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在一项多国研究中，环境绩效如何促进公司财务绩效？竞争优势的中介作用和自愿环保举措的调节作用

本研究在多国样本中全面调查了环境绩效何时以及如何影响财务绩效。本研究通过使用来自 34 个国家的 161 家 "气候行动 100 +"公司的面板（涵盖 2015 年至 2021 年），应用了 GMM。我们的分析表明，企业的环境绩效对财务绩效有积极的促进作用，而且结果对其他衡量标准也是稳健的。结果表明，竞争优势是环境绩效与财务绩效之间关系的中介。同样，自愿性环境法规的采用和环境管理也能积极调节两者之间的关系，减少污染对财务绩效的负面影响。我们的结论是，企业应从弗里德曼的利润最大化理念转向哈特的基于自然资源的污染预防和产品管理理念，以确保可持续的财务绩效。我们的研究结果对关注企业运营、环境绩效和碳排放减缓战略的管理者、公司和政策制定者具有重要意义。图表摘要

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来源期刊

Journal of the Knowledge Economy ECONOMICS-

CiteScore

5.90

自引率

27.30%

发文量

228

期刊介绍： In the context of rapid globalization and technological capacity, the world’s economies today are driven increasingly by knowledge—the expertise, skills, experience, education, understanding, awareness, perception, and other qualities required to communicate, interpret, and analyze information. New wealth is created by the application of knowledge to improve productivity—and to create new products, services, systems, and process (i.e., to innovate). The Journal of the Knowledge Economy focuses on the dynamics of the knowledge-based economy, with an emphasis on the role of knowledge creation, diffusion, and application across three economic levels: (1) the systemic ''meta'' or ''macro''-level, (2) the organizational ''meso''-level, and (3) the individual ''micro''-level. The journal incorporates insights from the fields of economics, management, law, sociology, anthropology, psychology, and political science to shed new light on the evolving role of knowledge, with a particular emphasis on how innovation can be leveraged to provide solutions to complex problems and issues, including global crises in environmental sustainability, education, and economic development. Articles emphasize empirical studies, underscoring a comparative approach, and, to a lesser extent, case studies and theoretical articles. The journal balances practice/application and theory/concepts.