Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries

Sergio Manrique and Carmen-Pilar Martí-Ballester
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Sergio Manrique: Business Department, Universitat Autònoma de Barcelona, Cerdanyola del Vallès 08193, Spain
Carmen-Pilar Martí-Ballester: Business Department, Universitat Autònoma de Barcelona, Cerdanyola del Vallès 08193, Spain

Sustainability, 2017, vol. 9, issue 11, 1-30

Abstract: The relationship between corporate environmental performance and corporate financial performance has been extensively studied in developed countries, and has received less attention in developing countries. For this reason, the main objective of this paper is to examine the effect of corporate environmental performance on corporate financial performance during a global financial crisis, depending on the economic development level of the country where a firm is located. To this end, we obtain data for a sample of 2982 large firms from 2008 to 2015. We apply Petersen’s approach to these data, adjusting the standard errors for clustering by both firm and year. The results obtained show that the adoption of environmental practices significantly and positively affects the corporate financial performance in developed and developing countries. However, this effect is stronger for firms located in developing countries than those located in developed countries.

Keywords: corporate environmental performance; corporate financial performance; developing countries; developed countries; panel data (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (48)

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