Environmental Management System and Financial Performance

Tze San Ong (), Boon Heng Teh (), Sin Huei Ng () and Wei Ni Soh ()
Additional contact information
Tze San Ong: Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia
Boon Heng Teh: Faculty of Management, Multimedia University
Sin Huei Ng: INTI International University
Wei Ni Soh: Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia

Institutions and Economies (formerly known as International Journal of Institutions and Economies), 2016, vol. 8, issue 2, 27-53

Abstract: The paper aims to explore the relationship between ISO 14001 certification and a company’s financial performance to investigate whether the certification to ISO 14001 environmental management standard has benefited the company’s financial performance or not. Using Malaysia as the research context, the results of a linear regression analysis show that firms with above-average performance have a greater tendency to pursue ISO 14001 certification. The findings also indicate that there is a significant relationship between ISO14001 certification and a company’s financial performance in an emerging economy context. The reason is the adoption of ISO 14001 standard does offers many benefits to companies, such as greater reputation and brand awareness on one hand, and higher sales and investors’ confidence on the other. The ISO 14001 certification helps to develop a better system which leads to costs reduction and revenue increase in the long run.

Keywords: Environmental management system; ISO 14001; Malaysia; return on assets; return on equity (search for similar items in EconPapers)
JEL-codes: G34 M14 M41 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://ijie.um.edu.my/filebank/published_article/1 ... al%20Performance.pdf (application/pdf)

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:umk:journl:v:8:y:2016:i:2:p:27-53

Access Statistics for this article

More articles in Institutions and Economies (formerly known as International Journal of Institutions and Economies) from Faculty of Economics and Administration, University of Malaya Contact information at EDIRC.
Bibliographic data for series maintained by Teoh Wern Jun ().