Environmental Investment and Firm Performance: A Network Approach

Abstract

This study examines the role of investment in environmental production practices for both environmental performance and energy efficiency over time. We employ a network DEA approach that links successive production technologies through intertemporal investment decisions with a period by period estimation. This allows us to estimate energy efficiency and environmental performance separately, as well as productivity change and its associated decompositions into efficiency change and technology change. Incorporating a network model also allows us to account for both short-term environmental management practices and long-term environmental investments in each of our productivity measures. We apply this framework to a panel of detailed plant-level production data for Swedish manufacturing firms covering the years 2002-2008.

Do corporate green investments improve environmental performance? Evidence from the perspective of efficiency

“…Many researchers have primarily concentrated on environmental aspects and assess eco-efficiency (Burnett & Hansen, 2008;Figge & Hahn, 2013;Hua et al, 2007;Yu et al, 2018) or environmental efficiency (Chang et al, 2013;Jiang et al, 2016;Li et al, 2013;Song & Zhou, 2016). Another scream of literature explores the interactions among environmental investments, productivity, energy efficiency, and environmental performance (Bostian et al, 2016;Lundgren & Zhou, 2017). There is a paucity of empirical research to directly combine corporate green investments with environmental performance from the perspective of efficiency.…”

“…We then hand-collect a variety of pollutant emission data of each polluting firm 1 for actual undesirable outputs (b a ) from firm annual reports, corporate social responsibility reports, sustainability reports, and environmental reports. Given that previous research on the relationship between investments in environmental dimensions and firm performance is inconsistent or influenced by certain moderators (Antonietti & Marzucchi, 2014;Bostian et al, 2016;Broberg, Marklund, Samakovlis, & Hammar, 2013;Jiang et al, 2016;Sengupta, 2012;Singal et al, 2014), we choose not to include firm performance as the actual desirable output (y a ) in our models. Accordingly, the SBM-DEA model can establish an efficient frontier, and calculate GIE (ρ), best target green investments (X) and target pollutant emissions (B) for each sample firm.…”

“…Several studies reveal the trends and schemes of green investments (Eyraud et al, 2013;Karásek & Pavlica, 2016), and examine investors' response to green investments (Martin & Moser, 2016). Another scream of literature explores the relationship between green investments and firm performance, including environmental performance, productivity, and export performance (Antonietti & Marzucchi, 2014;Bostian, Färe, Grosskopf, & Lundgren, 2016;Lundgren & Zhou, 2017). There is a paucity of empirical research to directly combine corporate green investments with environmental performance from the point of efficiency.…”

“…First, our study extends green finance and environmental accounting literature by demonstrating the importance of green investment efficiency. Previous literature focuses almost exclusively on green investments (Antonietti & Marzucchi, 2014;Ateş et al, 2012;Bahn et al, 2012;Bostian et al, 2016;Doval & Negulescu, 2014;Eyraud et al, 2013;Inderst, Kaminker, & Stewart, 2012;Karásek & Pavlica, 2016;Kim, 2013;Maggioni & Santangelo, 2017;Schaltenbrand et al, 2016;Song et al, 2017;Voica, Panait, & Radulescu, 2015). Nevertheless, we quantify firm-level green investment efficiency and provide the initial evidence, which suggests the main problem of lowefficiency firms is that managers ignore the efficient allocation and value-creating use of resources in terms of reducing pollutant emissions.…”

Management of Sustainable Entrepreneurship Adaptation to Tax Changes in Environmental Investment

“…The research of environmental investments and their characteristics in order to obtain economic effect and adherence to the principle of prevention within the framework of sustainable development, avoiding eco-destructive effects from production activity have been investigated by Klassen, Vachon (2003), Higgins, Hajkowicz, Bui (2008), Bostian, Färe, Grosskopf, Lundgren,(2016), Testa et.al. (2016, Mahmood, Furqan, Bagais (2019).…”