Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries

Manrique, Sergio; Martí-Ballester, Carmen Pilar

doi:10.3390/su9111957

Cited by 173 publications

(174 citation statements)

References 135 publications

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“…Moreover, our literature review confirmed the statement of Manrique and Martí-Ballester [30] (p. 1), that the relationship between corporate environmental performance and corporate financial performance has been extensively studied in developed countries, and has received less attention in developing countries, in particular with respect to the banking sector. To our knowledge, this kind of studies is almost in-existent.…”

Section: Csp-cfp Relation In Banks and Its Determinants In Ceecsupporting

confidence: 58%

“…This approach states that CSR can be strategically managed to add value, sustainability and competitiveness to the company and seeks to foster CFP through CSP [5]. However, the neoclassical economic theory indicates that through the implementation of CSR policy the company's profitability could be decreased as a result of high production costs linked to environmental innovation [30] (p. 21).…”

Section: Heterogeneity Of Relation Between Corporate Social-environmementioning

confidence: 99%

“…A wide range of research has been done trying to find a clear and unequivocal relationship between CSP and CFP, using different theories as well as by means of various qualitative and quantitative analyses. The theories, most commonly used to explain the relationship between CSP and CFP, are following: legitimacy theory, stakeholder theory, and agency theory e.g., [15,16,[23][24][25][26][27][28][29][30]. These three major theories suggest that companies should be sustainable and should incorporate corporate sustainability in their core strategic goals because the adoption of social-environmental practices allows for companies to save production costs by reducing environmental risks, while enhancing their relationship with the key stakeholders, which contributes to achieving competitive advantages, and thus improves their corporate financial performance in the long term.…”

Section: Heterogeneity Of Relation Between Corporate Social-environmementioning

confidence: 99%

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Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries

2018

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Abstract:Developed market economies demonstrate a growing interest in issues concerning Corporate Social Responsibility (CSR) and its effects, confirmed by the sizeable theoretical and empirical literature on this issue. A substantial research proves also the positive relation between CSR commitment and financial results of banks in mature markets. However, there is less evidence on CSR existence and its impact in other geographical areas, especially in the research concerning Central and Eastern European Countries (CEEC). In our study we analyze the interrelation between being socially responsible and tangible financial outcome (Corporate Financial Performance-CFP) of banks in the CEEC. The aim is also to empirically verify the relation between efficiency of corporate social-environmental performance (CSP) and the efficiency of CFP for CEEC banks. In our study, we analyze the financial and CSP data of the biggest public banks in CEEC. The researched period is 2012-2016. The empirical part analyzes the interrelation between CSP and CFP based on the panel regression. Moreover, in order to evaluate the CSP efficiency and the CFP efficiency we use the Data Envelopment Analysis (DEA) approach. The empirical results reveal that in case of banks in the Central and Eastern Europe (CEE) region being socially responsible is not reflected in the bottom line. The financial condition of the banks also does not impact the CSR engagement. Our study confirms, however, that CEEC banks with better financial efficiency have higher efficiency of CSR activities. The conclusions may lead to the improved decision-making processes concerning CSR activities and their communication in banks in CEEC.

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Section: Csp-cfp Relation In Banks and Its Determinants In Ceecsupporting

confidence: 58%

Section: Heterogeneity Of Relation Between Corporate Social-environmementioning

confidence: 99%

Section: Heterogeneity Of Relation Between Corporate Social-environmementioning

confidence: 99%

See 1 more Smart Citation

Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries

2018

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“…However, there are still contradicting ideas on the signs of the relationship between CSR and financial performance. The documented sign of the relationship may indicate negative [3], neutral [4], or positive [5][6][7][8] linkages. Accounting and finance researchers have also documented important findings on the benefits of CSR, such as reduced business risk, information asymmetry, cost of capital, insider trading profit and analyst forecast errors and increased customer trust and loyalty, employee retention, productivity, and company reputation.…”

Section: Introductionmentioning

confidence: 99%

CSR Performance, Financial Reporting, and Investors’ Perception on Financial Reporting

Timbate

Park

2018

Sustainability

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This study examines whether socially responsible firms behave differently from other firms in their financial reporting. Specifically, we question whether firms that are better in their corporate social responsibility (CSR) performance also behave in a responsible manner to maintain their financial reporting quality and whether the market rewards such responsible behaviors. Using data from S&P 500 US companies, we find that socially responsible firms are less likely to manage their earnings. However, we fail to find significant relationships between CSR and investors' perceptions on earnings, measured by stock returns and earnings response coefficient. We interpret the results as investors not fully reflecting the benefits from CSR performance. Our findings are consistent with the notion that CSR activities are motivated by managers' ethical incentives to serve the interests of stakeholders.

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“…According to several studies that analyzed the effect of corporate environmental performance on corporate financial performance conducted by Manrique and Ballester (2017), Soewarno et al 2018, and Dobre et al 2015stated that corporate environmental performance has a significant positive effect on corporate financial performance. Meanwhile, according to research conducted by Iwata and Okada (2010), states that corporate environmental performance has no significant influence on the corporate financial performance.…”

Section: Corporate Environmental Performance and Corporate Financial mentioning

confidence: 99%

The Moderating Effect of Competitive Business Strategy on Corporate Environmental Performance and Corporate Carbon Emission Disclosure Towards Corporate Financial Performance

2019

JESD

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The purpose of this research is to examine the effect of corporate environmental performance and corporate carbon emission disclosure toward corporate financial performance with competitive business strategy as moderating variable. The research design is quantitative methods using secondary data, which is data from the sustainability report of 18 go public companies listed on the Indonesia stock exchange from 2015 to 2017, with 54 units of analysis for the period of 2015-2017. The data analysis used in this research was multiple linear regression with data panel, which is processed by using SPSS. The results show that: (i) corporate environmental performance has a positive and significant effect towards the corporate financial performance; (ii) corporate carbon emission disclosure has not a significant effect towards the corporate financial performance; (iii) competitive business strategy strengthens the effect of corporate environmental performance towards the corporate financial performance; (iv) competitive business strategy has not effect of corporate carbon emission disclosure towards the corporate financial performance. This research contributes to provide the corporate environmental performance literature, corporate carbon emission disclosure literature, and corporate financial performance literature. The results of this study can contribute to making consideration for go public companies to consider whether corporate carbon emission disclosure are needed or not in the direction of the corporate financial performance.

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Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries

Cited by 173 publications

References 135 publications

Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries

Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries

CSR Performance, Financial Reporting, and Investors’ Perception on Financial Reporting

The Moderating Effect of Competitive Business Strategy on Corporate Environmental Performance and Corporate Carbon Emission Disclosure Towards Corporate Financial Performance

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