EconPapers    
Economics at your fingertips  
 

Dynamic capability: explaining the impact of ISO 14001 on Corporate Financial Performance

Jiangning Zhao and D. Steven White

International Journal of Services and Operations Management, 2010, vol. 6, issue 4, 470-488

Abstract: This study employs a quasi-experimental design to examine the function of dynamic capabilities (early adoption and path-dependent learning experience) in the process of implementing ISO 14001. Approximately 97 pairs of companies (N = 194) were collected from the Standard & Poor's (S&P) database, all of whom had at least one International Organisation for Standardisation (ISO) certificate and for whom five years of financial data were available. The initial differences were controlled using Analysis of Covariance (ANCOVA) to compare ISO companies with their matched comparison companies on the effect of ISO 14001 registration (independent variable) and on financial performance (two dependent variables): Return on Revenue (ROR) and Return on Assets (ROA). The results indicate that ISO 14001 registration has led to a reduced ROR in the two-year period and no change in the third year. ROA was not associated with ISO 14001 registration. Early adoption, the length of ISO registration and the size of the company did not affect the relationship between ISO registration and financial performance. Furthermore, the results illustrate that many companies have not yet gained the capability to ruminate and digest the dynamic nature of ISO 14001. An opportunity exists for future researchers to establish and examine the function of dynamic capabilities and their impact on the quality of ISO implementation.

Keywords: ISO 14001 registration; environmental management; environment; dynamic capabilities; financial performance; quality standards; early adoption; path-dependent learning experiences; Standard & Poor's; corporate databases; ISO certification; financial data; analysis of covariance; ANCOVA; matched comparisons; independent variables; dependent variables; return on revenue; ROR; return on assets; ROA; company size; environmental standards. (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.inderscience.com/link.php?id=32920 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsoma:v:6:y:2010:i:4:p:470-488

Access Statistics for this article

More articles in International Journal of Services and Operations Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker (informationadministrator5@inderscience.com).

 
Page updated 2023-11-11
Handle: RePEc:ids:ijsoma:v:6:y:2010:i:4:p:470-488