It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance

Markus Hang, Jerome Geyer‐Klingeberg and Andreas W. Rathgeber
Authors registered in the RePEc Author Service: Jerome Geyer-Klingeberg

Business Strategy and the Environment, 2019, vol. 28, issue 2, 257-273

Abstract: Research on the relationship between corporate environmental performance (CEP) and financial performance (CFP) continuously receives high attention in both general media and academic publications. One central issue concerns the causal effects between the two constructs. Because existing primary literature is characterized by its heterogeneous study designs and mixed empirical evidence, the aim of this paper is to explicitly shed light on the causality effects between CEP and CFP by means of a meta‐analysis of 893 empirical estimates from 142 CEP–CFP studies. Our findings suggest that in the short run (1 year), financial resources can increase a firm's environmental performance as proposed by the slack resources hypothesis; however, the effects disappear in the long run (after more than 1 year). Conversely, increasing environmental performance has no short‐term effect on a corporate financial performance, whereas a firm significantly benefits in the long term, which is in accordance with the Porter hypothesis. Overall, our results show that the causality between environmental performance and financial performance depends on the time horizon.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Downloads: (external link)
https://doi.org/10.1002/bse.2215

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:bla:bstrat:v:28:y:2019:i:2:p:257-273

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1002/(ISSN)1099-0836

Access Statistics for this article

Business Strategy and the Environment is currently edited by Richard Welford

More articles in Business Strategy and the Environment from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().