Environmental performance, political connection, and financial performance: evidence from global oil and gas companies

Tarmizi, Nur Farrahanie Ahmad

doi:10.1007/s11356-022-22881-5

Cited by 4 publications

(3 citation statements)

References 81 publications

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“…The RBV theory is widely adopted by previous studies to clarify the link between carbon emissions reduction initiatives and financial performance (Alsaifi et al, 2020;Brahmana and Kontesa, 2021;Sharma et al, 2022;Tarmizi and Brahmana, 2022;Issa and Hanaysha, 2023c). The RBV theory was first introduced by Wernerfelt (1984) and developed latterly by Barney (1991).…”

Section: Theoretical Literature Reviewmentioning

confidence: 99%

“…RBV theory also emphasizes the importance of firm-specific resources and capabilities in generating sustained competitive advantages (Aragón-Correa and Sharma, 2003). Firms that effectively manage and reduce their carbon emissions can develop unique expertise, knowledge and relationships in sustainable practices (Shakil, 2021; Tan and Zhu, 2022; Issa and Fang, 2019). These resources are difficult to replicate by competitors, resulting in a competitive advantage that can lead to superior financial performance over the long term (Mohammad and Wasiuzzaman, 2021; Rabaya and Saleh, 2022).…”

Section: Theoretical Literature Reviewmentioning

confidence: 99%

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Do emissions reduction initiatives improve financial performance? Empirical analysis of moderating factors

Issa

2023

IJAIM

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Purpose This study aims to examine the relationship between carbon reduction initiatives and financial performance. Additionally, it explores potential moderating variables, such as corporate social responsible (CSR) strategy and corporate governance practices, that may strengthen the link between carbon reduction initiatives and financial performance. Design/methodology/approach The empirical analysis is conducted using 1,740 firm-year observations from UK firms listed on the FTSE 350. Data on carbon emissions and firm-specific characteristics are obtained from the Refinitiv Eikon database for the period 2011–2020. Various econometric techniques, including ordinary least squares and system generalized method of moments, are used to examine the relationship between carbon reduction initiatives and financial performance. Additionally, alternative samples are used to further explore this relationship. Findings The author observes a significantly positive association between carbon reduction initiatives and financial performance in this study. Additionally, the significance of this relationship is found to be present specifically after the announcement of the Paris Agreement. Furthermore, a channel analysis reveals that moderating factors like CSR strategy and corporate governance quality influence this relationship. Practical implications The study underscores the importance of carbon reduction initiatives for sustainable business growth and financial performance. Managers can use these insights to prioritize investments in sustainable practices. Policymakers should consider implementing supportive regulations to incentivize companies to adopt carbon reduction strategies. Originality/value This study adds value to the existing body of literature by empirically examining the moderating role of CSR strategy and best corporate governance practices in the relationship between carbon reduction initiatives and financial performance. The findings contribute to a deeper understanding of how these factors interact and influence the outcomes.

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Section: Theoretical Literature Reviewmentioning

confidence: 99%

Section: Theoretical Literature Reviewmentioning

confidence: 99%

Do emissions reduction initiatives improve financial performance? Empirical analysis of moderating factors

Issa

2023

IJAIM

View full text Add to dashboard Cite

show abstract

“…Political connections, a type of government-business relationship [6][7][8], are on one side a significant means for the government to intervene in enterprises [9]; on the other side, they are critical for the access of government resources by firms [10,11]. While much research has probed into how political connections affect the economic decision-making of a firm [12], robust studies on their influence on environmental decisionmaking is limited.…”

Section: Introductionmentioning

confidence: 99%