In this study, we examine whether corporate environmental responsibility (CER) plays a role in enhancing operating performance in the financial services sector. Because achieving success with CER investing is often a long-term process, we maintain that by effectively investing in CER, executives can decrease their firms’ environmental costs, thereby enhancing operating performance. By employing a unique environmental data set covering 29 countries, we find that the lowering of environmental costs takes at least one or two years before enhancing return on assets (ROA). We also find that lowering environmental costs has a more immediate and substantial effect on financial services firm performance in well-developed financial markets than in less-developed financial markets. These results are economically and statistically significant and robust even after controlling for endogeneity and using an additional performance measure. We interpret our empirical results as supporting the social impact and reputation-building hypothesis. Our findings also suggest that policy makers dealing with corporate sustainability management should pursue an environment-centered industry policy not only at the manufacturing sector but also at the financial services sector, as firms in both sectors with lower environmental costs perform better.
Keywords: Corporate Environmental Responsibility; Environmental Costs; Financial Performance; Corporate Social Responsibility; Environmental Sustainability Management
학회소식
[2013년 제 4차] Environmental Costs and Firm Performance in the Fin
작성자 : 관리자
조회수 : 890
게시일 :
2013-12-16
