Factors and Contingencies for the “It Pays to Be Green Hypothesis”. The European Union’s Emissions Trading System (EU ETS) and Financial Crisis as Contexts

Joaquín Cañón- de-Francia and Concepión Garcés-Ayerbe
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Joaquín Cañón- de-Francia: Department of Management, University of Zaragoza, 50005 Zaragoza, Spain
Concepión Garcés-Ayerbe: Department of Management, University of Zaragoza, 50005 Zaragoza, Spain

IJERPH, 2019, vol. 16, issue 16, 1-15

Abstract: This study provides empirical evidence related to the “it pays to be green” hypothesis. Based on information from panel data approximately 42 industrial companies during an 8-year period, we determine some of the factors and contingences that affect the fulfilment of that hypothesis. We find that a certain level of proactivity in environmental strategy design is one of the conditions that favors a positive relationship between environmental investment and financial performance. We also provide empirical evidence on how some external conditions affect this positive relationship, such as regulatory pressure from the European Union Emissions Trading System (EU ETS) and the financial crisis.

Keywords: environmental proactivity; financial performance; contingent theory; European Union’s Emissions Trading System; financial crisis (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
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