 How do corporate environmental policy and corporate reputation affect risk‐adjusted financial performance?Francesco Gangi, Lucia Michela Daniele and Nicola Varrone Business Strategy and the Environment, 2020, vol. 29, issue 5, 1975-1991 Abstract: The current study aims to answer dual, related questions: Does corporate environmental policy affect corporate reputation, and does this link also influence risk‐adjusted profitability and company's risk? With a comprehensive framework involving analyses of each question, among a sample of firms traced by the Reputation Institute, this study reveals several notable results, after correcting for endogeneity biases. First, environmental engagement and green product innovation are both antecedents of corporate reputation. Second, corporate reputation has a positive impact on risk‐adjusted profitability and Z score indicator of financial distress risk. Thus, corporate environmental responsibility and green practices represent cospecialized assets that enhances an intangible asset, namely, corporate reputation. The latter influence constitutes a missing link between sustainable development and the firm's financial performance. Overall, environmental engagement and corporate reputation act as insurance‐like protections of firm competitiveness. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:29:y:2020:i:5:p:1975-1991 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
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