The Effects of Corporate Green Efforts for Sustainability: An Event Study Approach

Yonghwi Noh
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Yonghwi Noh: College of Business Administration, Myongji University, Seoul 03674, Korea

Sustainability, 2019, vol. 11, issue 15, 1-15

Abstract: This study investigates the long-term effects of corporate green efforts on the financial performances of the US public firms by using the ISO 14001 certification. Based on the natural resource based view, the rigorous event study was employed using 174 US public firms on NYSE (New York Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotations) to analyze the pre and post abnormal performances of the certification during the 1996–2010 period. The results indicate that ROI and Tobins’s Q showed the immediate positive response after the firms’ applying for the certification, implying that the market accepts the announcement of ISO 14001 as a positive signal. Asset turnover also showed positive abnormal performances for the short and long term. The results imply that the corporate green efforts are beneficial to the firm by improving sales and profitability, while the capital market does not clearly respond to these efforts in the long run.

Keywords: environmental management; financial performance; sustainability; ISO 14001 (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:15:p:4073-:d:252439

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