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Does it really pay to be green? Determinants and consequences of proactive environmental strategies

Does it really pay to be green? Determinants and consequences of proactive environmental strategies,10.1016/j.jaccpubpol.2010.09.013,Journal of Accoun

Does it really pay to be green? Determinants and consequences of proactive environmental strategies   (Citations: 4)
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This study examines what factors affect firms’ decisions to adopt a proactive environmental strategy and whether pursuing proactive environmental strategies leads to improved financial performance. Using longitudinal data from 1990 to 2003 for the four most polluting industries in the US (Pulp & Paper, Chemical, Oil & Gas, and Metals & Mining), this research empirically models the causal relations between firms’ environmental performance and their financial resources and management capability. Our results show that positive (negative) changes in firms’ financial resources in the prior periods are followed by significant improvements (declines) in firm’s relative environmental performance in the subsequent periods. In addition, we also find that significant improvements (declines) in environmental performance in the prior periods can lead to improvements (declines) in financial performance in the subsequent periods after controlling for the impact of Granger causality. Finally, 3SLS analysis suggests that the positive association between environmental performance and financial performance is robust. Overall, our results are consistent with predictions of the resource-based view of the firm and indicate that although becoming “green” is associated with improvement in firm performance, such a strategy cannot be easily mimicked by all firms.
Journal: Journal of Accounting and Public Policy - J ACCOUNT PUBLIC POL , vol. 30, no. 2, pp. 122-144, 2011
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    • ...Clarkson et al. (2011), unlike Russo and Fouts, Hart and...
    • ...Why would managers ever decrease levels of CER or refrain from increasing them if higher levels of CER lead to higher levels of corporate financial performance? Clarkson et al. (2011) found the answer in a resource-based view of companies...

    Yongtae Kimet al. Do Corporations Invest Enough in Environmental Responsibility?

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