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Environmental Management Practices and Financial Performance:Evidence from Large Listed Indian Enterprises

Surender Kumar and Pritika Dua
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Pritika Dua: Department of Business Economics,University of Delhi,South Campus

No 314, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: Large enterprises have been at forefront of environmental management with active participation in industry wide programs and adoption of ‘beyond compliance’ approach with more resources at their disposal. The present study revisits the premise of environmental-financial linkage in the Indian context with focus on large listed enterprises. We develop a comprehensive dataset of 459 large listed Indian companies covering major manufacturing and service sectors of the economy over a eleven year period from 2008-09 to 2018-19. Static and dynamic regression models are used to gauge the impact of environmental management practices adoption on firm profitability (Return on Assets and Return on Equity) and market valuation (Tobin Q, Market to Book Value Ratio and Excess Valuation to sales ratio). Empirical results suggest a positive impact of environmental management on firm profitability and market valuation in context of large listed enterprises. These results are of interest to corporate and policy makers for recognizing the financial implications of corporate environmental management. Key Words: Environmental Management Practices, Dynamic panel data models, Firm Valuation, Firm Profitability, Large Enterprises, India

Pages: 30 pages
Date: 2021-01
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-env
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