Do Corporations Invest Enough in Environmental Responsibility?

Kim, Yongtae; Statman, Meir

doi:10.1007/s10551-011-0954-2

Cited by 113 publications

(67 citation statements)

References 42 publications

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“…This has lead prior research on environmental issues to primarily investigate the effect it has on financial performance. Yet, so far these studies appear to find mixed results (Bansal and Roth 2000;Guenster et al 2011;Kim and Statman 2012;Margolis and Walsh 2003;Meng et al 2013;Sarkis and Cordeiro 1997). Most sceptics claim that environmental management requires heavy business investment that will be at the expense of shareholder wealth.…”

Section: Prior Research and Hypotheses Developmentmentioning

confidence: 97%

Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness

Dekker

Hasso

2014

J Bus Ethics

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We investigate if private family firms have a greater environmental performance focus than nonfamily firms, and if this relationship is moderated by the strength of the firms' social embeddedness. We empirically test these issues using a representative sample of 1452 private Australian small and medium-sized enterprises. Contrary to prevailing assumptions and previous indicative findings in the public firm context, our results show that family firms have a lower environmental performance focus than nonfamily firms. However, in cases where the firm is highly embedded in the social community, we find that family firms have a higher environmental performance focus. We explain our unexpected results by considering the role of financial risk in publicly held family firms. Accordingly, we posit that prior findings in the public firm context may be evidence of families expropriating wealth from nonfamily shareholders rather than altruistic pro-environmental behavior.

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Section: Prior Research and Hypotheses Developmentmentioning

confidence: 97%

Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness

Dekker

Hasso

2014

J Bus Ethics

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“…For example, Russo and Fouts (1997) use Franklin Research and Development Corporation (FRDC) data, which estimates CER levels through simple environmental ratings. To calculate CSR (or CER) scores, Kim and Statman (2012), Deng et al (2013), and Di Giuli and Kostovetsky (2014) use the KLD database that provides only binary The input/output model developed by Leontief (1970) uses information on the amount of resources required to produce a unit of output and where this output is sold. Trucost compiles a standard model by integrating the use and emissions of over 700 environmental resources.…”

Section: Direct Environmental Costsmentioning

confidence: 99%

Corporate Environmental Responsibility: A Legal Origins Perspective

2015

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In this study, we examine the determinants of corporate environmental responsibility (CER), as well as the relationship between legal systems and CER as measured by a unique set of global environmental cost data. Results of our analyses show that firms' legal origins affect CER, which requires a long-term management perspective. Specifically, our results indicate that civil law firms exhibit significantly higher levels of CER than common law firms. In addition, results of an auxiliary test suggest that manager shareholding has a significant, nonlinear relationship with CER. The association between a firm's legal origin and its CER performance remains robust after controlling for the effects of managerial ownership and issues related to endogeneity. Our findings imply that although the majority of corporate law studies in the past few decades provide support for the common law system emphasizing the maximization of shareholder value and investor protection, the civil law system stressing the maximization of stakeholder wealth and the importance of CER may become more influential in the coming decades as CER becomes central to firms' operations.

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“…Griffin and Mahon (1997, p.11) identified 80 different measures of financial performance, each claiming to be superior to the others. This has since been expanded by, for example, Galema et al (2008), Guenster et al (2011), and Kim and Statman (2012), who have begun using advanced measures from the discipline of finance as their CFP measure. Unsurprisingly, this approach has also been criticised for inadequately capturing all relevant indicators of a company's market value (Gregory and Whittaker, 2013).…”

Section: The Unprofitability Problemmentioning

confidence: 99%

What to make of unprofitable corporate social responsibility

Seidler

2016

IJCSSR

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Decades of empirical tests have yet to confirm that corporate social responsibility is and has been a financially responsible business strategy. This paper addresses why firms may choose to adopt a CSR strategy notwithstanding its bottom line effect. It is argued that a purely rational, enlightened self-interest understanding of the CSR movement is incomplete, and rather, that the insights of prospect theory allow for a fuller account of socially responsible behaviour. Analysing the business and political climate in which CSR has emerged, the paper concludes that a boundedly-rational approach to risk is inclining businesses to adopt CSR. The paper challenges business leaders and scholars to re-examine their assumptions of how risk is incorporated into CSR strategies, as well as suggesting a new path out of the social-financial performance controversy.

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Do Corporations Invest Enough in Environmental Responsibility?

Abstract: Corporate environmental responsibility, Corporate financial performance, Causality, Corporate social responsibility,

Cited by 113 publications

References 42 publications

Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness

Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness

Corporate Environmental Responsibility: A Legal Origins Perspective

What to make of unprofitable corporate social responsibility

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