Does green innovation damage financial performance of oil and gas companies?

Tonje Marthinsen Aastvedt, Niaz Bashiri Behmiri and Li Lu

Resources Policy, 2021, vol. 73, issue C

Abstract: This article investigates the effect of green innovation on financial performance of oil and gas companies. Using environmental pillar and environmental innovation scores to measure green innovation, the study estimates two panel datasets for the US and European oil and gas companies from 2010 to 2018. The results show that innovation score has a positive effect on financial performance of the US and European companies. The effect of environmental pillar score is not linear. In the US, at low level of environmental pillar score, there is a positive effect and at higher levels the effect turns to negative. In Europe, at low level of environmental pillar score, there is a negative effect, which turns positive at higher levels. Moreover, for European companies, higher crude oil prices negatively moderate the relationship between innovation score and financial performance. This result is important for policy makers to create more effective regulations and support systems. Furthermore, it is important for managerial board of companies to decide about the level of their green investment to develops their environmental performance while maintaining their desired financial performance.

Keywords: Green innovation; Financial performance; Oil and gas industry (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:73:y:2021:i:c:s0301420721002464

DOI: 10.1016/j.resourpol.2021.102235

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