Does environmental performance affect financial performance? Evidence from Chinese listed companies in heavily polluting industries

Shen, Feng; Ma, Yunwen; Wang, Run; Pan, Ningning; Meng, Zhiyi

doi:10.1007/s11135-019-00849-x

Cited by 29 publications

(23 citation statements)

References 40 publications

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“…Clean technology C_Tech ± Asset4 1 for the firm using clean technology, 0 otherwise (Blackman & Bannister, 1998;Clarkson, Li, et al, 2011) Research and development R&D ± Worldscope Log of total research and development expenditure. (Busch & Lewandowski, 2017;Horváthová, 2010;Manrique & Martí-Ballester, 2017;Shen et al, 2019;Surroca, Tribó, & Waddock, 2010;Yagi & Managi, 2018); (ii) Tobin's Q adequately capture the value of long-term investments (i.e., investments in environmentally friendly activities) (Dowell, Hart, & Yeung, 2000;Surroca et al, 2010); and (iii) Tobin's Q is less sensitive to management manipulation compared with other accounting-based measures (i.e., ROA and ROE) (Hassan & Romilly, 2018).…”

Section: Leveragementioning

confidence: 99%

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

et al. 2020

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This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP) and consequently ascertains whether environmental performance (EP) can mediate the EMPs-FP nexus. Distinctly using data envelopment analysis and generalised method of moments techniques to analyse a comprehensive dataset of Nikkei 225 listed firms from 2007 to 2018 (1920 firm-year observations), our findings first suggest that EMPs have a positive effect on FP. Second, the desired EP can be achieved through the adoption of comprehensive EMPs. Third, improved EP has a substantial impact on shaping the EMPs' effect on FP. These findings are consistent with the predictions of resource-based view and institutional theories. The results are robust to controlling for different types of alternative measures and endogeneities. The findings have important implications for academics, investors, managers, policymakers and regulators.

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Section: Leveragementioning

confidence: 99%

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

et al. 2020

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“…Their research employed cross‐sectional linear regressions and nonlinear threshold regressions for a sample of banks from 75 countries and concluded that access to finance has significantly positive effects on banks' financial performance in most estimation models; however, they do not find any significant impact of environmental financing. Shen et al (2019) studied the impact of environmental practices on financial performance. Their empirical results showed a concave–down quadratic relationship between environmental practices and financial performance.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The first group of researchers (Fang, Lau, Lu, Tan, & Zhang, 2019; Maudos & Fernández de Guevara, 2004; Tan, 2017; Tan, Floros, & Anchor, 2017; among others) examined the relationship between competition and banking performance. Whereas the second set of researchers (Alexopoulos, Kounetas, & Tzelepis, 2018; Cornett, Erhemjamts, & Tehranian, 2016; Nizam et al, 2019; Fatemi, Glaum, & Kaiser, 2018; Ferrero‐Ferrero, Fernández‐Izquierdo, & Muñoz‐Torres, 2016; Finger, Gavious, & Manos, 2018; Horváthová, 2010; Manrique & Martí‐Ballester, 2017; Shen, Ma, Wang, Pan, & Meng, 2019; and others) investigated the impacts of ESG on banking performance. Even though the above studies examined the relationship between competition and performance or environmental practices and performance, these researchers failed to integrate the impact of competition and environmental practices on banking performance.…”

Section: Introductionmentioning

confidence: 99%

Banks' environmental policy and business outcomes: The role of competition

Khattak

Saiti

2020

Bus Strat Env

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By integrating the two areas of competition–performance and environment–performance, this research explores if competition matters in the relationship between environmental practices and interest margins in the market. A panel of 458 banks from 74 countries for the period of 2006–2016 is used, and the sample is further divided into developed and developing countries. This paper uses the system Generalized Method of Moments estimator to tackle potential omitted variable bias, endogeneity, and simultaneity issues. Without competition, environmental practices only affect banks in developing countries; however, the results show a significant impact for the full sample, including developed countries, when the competition is taken into consideration, suggesting that competition might play a role in the relationship of environmental practices and interest margins. In the full sample, competition impacts the relationship negatively after a moderate level of competition is reached in the market. The environmental practices in developing countries are prone to competition in the market. In developed countries, the competition is found to be lightly positively moderating the impact of environmental practices on interest margins. Based on these findings, it is recommended that developing countries should have a low or moderate level of competition to encourage environmental practices. For developed countries, however, high competition should be preferred to encourage banks to consider environmental practices as one of their core business strategies. These findings are found robust to different statistical estimators.

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“…Business regulations can emphasize financial, social or environmental performance (Aragón-Correa et al 2020); for instance, research on heavily polluting industries reports that, although regulations are burdening, they can elevate both environmental and financial performance over time (Shen et al 2019). Given the diversity in business regulations and variety of performance parameters, it is not surprising that some studies report regulations as being associated with depressed firm performance, while others find the opposite.…”

Section: Business Regulations and Smes' Financial Performancementioning

confidence: 99%

Gendered regulations and SME performance in transition economies

et al. 2020

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This article explores the culture-regulations-gender triad in relation to SMEs' performance. Using a firm-level panel dataset drawn from 27 countries in Central and Eastern Europe and Central Asia between 2005 and 2014, we show that women and men experience and respond differently to regulations. Women take regulations very seriously and as a result, their SMEs see improved performance, whereas men discount the influence of regulations which then depresses the performance of their SMEs. However, when women respond to regulatory enforcers, it erodes the performance of their SMEs, whereas when men engage enforcers, the performance of their SMEs improves. The fact that women and men experience and respond to the same regulations differently-regardless of country effect and whether their SMEs are high-or low-performing businesses-suggests that regulations perpetuate gender biases, thus impacting not only individuals but even the organizations they lead. Our study expands gendered institutions theory by clarifying how regulations diffuse cultural values and influence women and men, as well as their SMEs, differently.

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Does environmental performance affect financial performance? Evidence from Chinese listed companies in heavily polluting industries

Cited by 29 publications

References 40 publications

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

Banks' environmental policy and business outcomes: The role of competition

Gendered regulations and SME performance in transition economies

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