Does it pay to go green? The environmental innovation effect on corporate financial performance

Farza, Khouloud; Ftiti, Zied; Hlioui, Zaineb; Louhichi, Waël; Omri, Abdelwahed

doi:10.1016/j.jenvman.2021.113695

Cited by 151 publications

(85 citation statements)

References 45 publications

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“… This result suggests that environmental performance seems like an organisational limitation that may restrict the capacity of firms to be financially resistant. Farza et al. (2021) .…”

Section: Appendix 1: Recent Studiesmentioning

confidence: 99%

“…In particular, the environmental performance of firms is one of the vital factors that affect lending decisions ( Wellalage and Kumar, 2021 ) and conditions of lending ( Goss and Roberts, 2011 ). Firms that display proactive environmental practices are seen to carry a lower level of risk ( Godfrey et al., 2009 ), accessibility to the financial market ( Jo and Na, 2012 ; Farza et al., 2021 ) and greater leverage ( Sharfman and Fernando, 2008 ). Despite overwhelming evidence to support the positive effect of environmental performance on firm performance, how environmental performance affects firm financing when the market experiences a major shock remains relatively unknown, 1 especially in case of SMEs (see the insights of literature in Appendix-1).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

Wellalage

Kumar

Hunjra

et al. 2022

Finance Research Letters

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“… This result suggests that environmental performance seems like an organisational limitation that may restrict the capacity of firms to be financially resistant. Farza et al. (2021) .…”

Section: Appendix 1: Recent Studiesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

Wellalage

Kumar

Hunjra

et al. 2022

Finance Research Letters

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“…Reviewing the latest research related to this paper, we found that, on the one hand, empirical research using firm data from developed countries mostly concluded that green innovation can improve enterprises' market performance, such as raising the firm value (Farza et al, 2021), reducing the risk of stock price crash (Zaman et al, 2021) and bringing about excess returns to investors (Szutowski, 2021). On the other hand, findings based on emerging economies differ markedly from the foregoing.…”

Section: Introductionmentioning

confidence: 83%

“…Using a panel data of 642 industrial enterprises in China, Wang et al (2021) estimated the impact of green innovation on CFP and found that environmental performance and market competitiveness are two important intermediary variables through which green innovation can improve CFP. Farza et al (2021), using a German firm dataset, demonstrated that environmental innovation can improve resource allocation efficiency and corporate reputation, leading to stronger competitiveness and better financial performance. However, it takes a certain time for innovation output to be fully applied to an enterprise's production and operation, so its impact on CFP may also lag (Ernst, 2001;Zhang et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Impact of Green Innovation on Firm Value: Evidence From Listed Companies in China’s Heavy Pollution Industries

2022

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The unspecified impact of green innovation on corporate financial performance has made some enterprises delay green innovation investment plans, and even abandon green innovation. Mitigating the economic concerns faced in the process of green innovation decision-making is of great significance to accelerate the process of enterprises’ green transformation. Using an unbalanced panel data of Chinese heavy pollution listed companies from 2008-2017, this paper investigates the impact of green innovation on firm value. We further test the likely channels through which green innovation can affect firm value, including the financial flexibility channel and analyst coverage channel. The study finds that: 1) increasing the proportion of green patent applications leads to the devaluation of firm value, but this devaluation effect only occurs in the short term; 2) both financial flexibility and analyst coverage partially mediate the impact of green innovation on firm value; 3) heterogeneity analysis indicates that enterprises can reduce the negative impact of green innovation on firm value by increasing the executive equity incentive and the management-employee pay gap. In addition, as economic policy uncertainty increases from low to high, the negative impact becomes smaller. Our research helps to broaden the cognitive boundaries of the economic impact of green innovation, and assists policymakers and researchers to better grasp the characteristics of green innovation behavior of enterprises in emerging economies. Finally, we provide useful enlightenments for policymakers and business managers to stimulate green innovation in enterprises.

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“…Simultaneously, green innovation can improve resource efficiency and corporate reputation and improve financial performance [16]. In addition, the green innovation capability and development level directly affect the economic development of a country or region and its competitiveness in the international community [17,18].…”

Section: Introductionmentioning

confidence: 99%

Investigation of Nexus between Knowledge Learning and Enterprise Green Innovation Based on Meta-Analysis with a Focus on China

Zhang

Sun

et al. 2022

Energies

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Knowledge learning is a vital pre-factor and the driving force of green enterprise innovation; hence, meriting the numerous academic research and accumulated relevant literature. In this paper, the meta-analysis methodology was used to explore the direction and intensity of the influence of knowledge learning on green enterprise innovation, taking 32 independent documents as research samples. Meta-analysis results showed that the search breadth and the search depth of green resources and the green resources absorption and integration have significant positive effects on the green innovation of enterprises, among which green resources absorption and integration were the most important. Further, the research on the moderating effect found that the measurement method of green innovation affected the relationship between knowledge learning and green enterprise innovation; however, the moderating effect of the research object was not pronounced.

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Does it pay to go green? The environmental innovation effect on corporate financial performance

Cited by 151 publications

References 45 publications

Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

Impact of Green Innovation on Firm Value: Evidence From Listed Companies in China’s Heavy Pollution Industries

Investigation of Nexus between Knowledge Learning and Enterprise Green Innovation Based on Meta-Analysis with a Focus on China

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