'Too-much-of-a-good-thing'? The role of advanced eco-learning and contingency factors on the relationship between corporate environmental and financial performance

Hengky Latan, Charbel Jose Chiappetta Jabbour (), Ana Beatriz Sousa Jabbour (), Douglas William Scott Renwick, Samuel Fosso Wamba and Muhammad Shahbaz
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Charbel Jose Chiappetta Jabbour: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, University of Stirling
Ana Beatriz Sousa Jabbour: Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School
Samuel Fosso Wamba: TBS - Toulouse Business School

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Abstract: Inspired by the natural-resource-based view (NRBV) theory, we attempt to shed light on a controversy which has been persistent over the last decade, concerning the relationship between corporate environmental performance (CEP) and corporate financial performance (CFP). Using the 'too-much-of-a-good-thing' (TMGT) concept, which suggests that "too much can be worse than too little," we link mixed results and consider the roles of advanced eco-learning and contingency factors in influencing the CEP-CFP relationship. Based on a sample composed of ISO 14001 certified companies in Indonesia, and analyzing the data using consistent Partial Least Squares (PLSc), we found that: the CEP-CFP relationship follows an inverted U-shape; advanced eco-learning is a significant predictor of the CEP-CFP relationship, meaning that organizations able to develop higher eco-learning capability will be better able to identify the ideal boundaries of investment in environmental performance without reducing their financial performance; and that contingency factors such as environmental strategy and firm size have a significant role in influencing the CEP-CFP relationship. The study's limitations, implications for practitioners and a future research agenda are also detailed.

Keywords: Advanced eco-learning; Conservation of Natural Resources; Contingency factors; Environmental accounting; Environmental performance; Financial performance; Forecasting; Indonesia; Natural Resources; Organizations (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

Published in Journal of Environmental Management, 2018, 220, pp.163--172. ⟨10.1016/j.jenvman.2018.05.012⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04275093

DOI: 10.1016/j.jenvman.2018.05.012

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