Impact of Firm-Specific and Macroeconomic Determinants on Environmental Expenditures: Empirical Evidence from Manufacturing Firms

Salim Bagadeem, Ayesha Siddiqui, Sapna Arora Narula, Najib H. S. Farhan () and Muneer Ahmad Magry ()
Additional contact information
Salim Bagadeem: Faculty of Business Studies, Arab Open University, P.O. Box 84901, Riyadh 11681, Saudi Arabia
Ayesha Siddiqui: Department of Commerce, Aligarh Muslim University, Aligarh 202002, India
Sapna Arora Narula: School of Management Studies, Nalanda University, Rajgir 803116, India
Najib H. S. Farhan: Faculty of Business Studies, Arab Open University, P.O. Box 84901, Riyadh 11681, Saudi Arabia
Muneer Ahmad Magry: School of Management Studies, Nalanda University, Rajgir 803116, India

Economies, 2024, vol. 12, issue 7, 1-24

Abstract: This research aims to examine the association between firm-specific and macroeconomic determinants and environmental expenditures in the Indian manufacturing sector. Furthermore, it seeks to investigate the moderation effect of country-level governance and economic development on the association between macroeconomic, firm-specific, and environmental expenditures. The current study is based on 70 manufacturing firms for the period of 2011 to 2021. The dependent variable is environmental expenditures and the independent variables are firm-specific and microeconomic determinants. The results revealed that market capitalization and firm size have a positive and significant impact on environmental expenditures. On the other hand, inflation and the rule of law negatively and significantly affect environmental expenditures. Regarding the moderation effect, the results revealed that the rule of law and GDP positively moderate the association between inflation and environmental expenditures. Hence, this research has significant implications for corporate executives, financial experts, regulators, and other interested parties.

Keywords: firm-specific; macroeconomic determinants; economic development; environmental expenditures; country-level governance; moderation effect (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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