The effect of the ISO-14001 environmental management system on corporate financial performance

Zhao, Jiangning

doi:10.1504/ijbex.2008.017575

Cited by 22 publications

(16 citation statements)

References 15 publications

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“…The results of this study are in line with the earlier studies, which also found negative relationship between ISO 14001 and firm's market performance (Aarts & Vos, 2001;Cañón-de-Francia & Garcés-Ayerbe, 2009;Zhao, 2008). The outright reason for the negative market performance of the firm associated with the materialistic behavior of the investors in the emerging economies, as voluntary initiative like ISO 14001 by the corporate is not the important concern for the investors, rather, they are more concerned about material security, and they take environmental management system as an extra cost (Globerman & Shapiro, 2009).…”

Section: Propensity Score Matching Techniquesupporting

confidence: 92%

Impact of environmental policy on firm's market performance: The case of ISO 14001

Riaz

Saeed

2019

Corp Soc Responsibility Env

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Environmental Management System, that is, ISO 14001, helps to build corporate reputation, legitimacy, and can also be considered as firms' strategic response to institutional pressure to reduce the impact of business activity on natural environment. It arises the question: does ISO 14001 pay off financially? Unfortunately, this question remains broadly unanswered. Current studies on this issue show mixed and inconclusive findings. By employing rigorous event study approach, this paper compares ISO 14001 certified firms with their noncertified counterpart based on different matching criteria that include size, return on asset, and industry. The results indicate that the ISO 14001 is negatively evaluated by the investors in both the short and long run. This paper also suggests implications for policy makers, managers, and other nonprofit organizations.

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Section: Propensity Score Matching Techniquesupporting

confidence: 92%

Impact of environmental policy on firm's market performance: The case of ISO 14001

Riaz

Saeed

2019

Corp Soc Responsibility Env

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“…Zaho [37] notes that environmental investments appear to conflict with maximization of shareholder value. The results of the statistical analysis used in the above study indicate that the registration of ISO 14001 environmental management systems has led to lower profitability.…”

Section: Corporate Social Performance and Financial Performance: The mentioning

confidence: 99%

Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis

2016

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This study examines the impact of corporate sustainability (CS) on stock market returns for FTSE 350 companies over the period 2006-2012. We find that an investment strategy that bought shares in companies with balanced financial, social, and environmental activities would have earned an annual four-factor alpha for a value-weighted portfolio of 3.54% per year during the sample period and 2.98% above industry benchmarks. In addition, we find that CS is negatively correlated with stock return volatility, and investing in companies with CS not only generates higher returns during peak phases, but also diminishes shareholders' losses during bear phases. We have also carried out an additional, out-of-the-sample analysis for the years 2013-2015 which confirmed our results.

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“…Resources and capabilities are deemed valuable when rare, imperfectly imitable, and not substitutable (Peteraf, 1993). Under such circumstances, organizational resources and capabilities are suitable to build and sustain a long-lasting competitive advantage and preserve it against competitors' attempts to erode it (Best & Thapa, 2013;Johnson, 2015) ▪ Dynamic capabilities (Russo, 2009;Zhao, 2008) ▪ Institutional theory (Prajogo et al, 2012;Sarkis et al, 2010;Simpson, Power, & Klassen, 2012;Yin & Schmeidler, 2009) ▪ Organizational learning (Epstein & Roy, 1997) ▪ Resource-based view Prajogo et al, 2012;Yin & Schmeidler, 2009;Ziegler & Nogareda, 2009) ▪ Signaling theory (Zobel, 2013) ▪ Stakeholder theory (Dragomir, 2008;Sarkis et al, 2010) ▪ Transaction cost (Montiel et al, 2012) ▪ Institutional theory (Aravind & Christmann, 2008;Aravind & Christmann, 2007) Nontechnical approaches (Barney, 1986). Within the corporate sustainability literature, the RBV has been frequently adopted to motivate the relation between proactive environmental strategies and enhanced competitive performance, by highlighting the specific organizational capabilities that underlie such relation (Hart, 1995;Russo & Fouts, 1997).…”

Section: Resource-based View Of the Firmmentioning

confidence: 99%

Organization and management theories in environmental management systems research: A systematic literature review

et al. 2019

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Environmental management systems have attracted considerable attention from organizational and management scholars, owing to their widespread adoption in most industry sectors. Despite the extensive empirical literature, academic research on ISO 14001 and Environmental Management and Audit Scheme (EMAS) remains characterized by a technical and pragmatic connotation and scarce theoretical contribution. As this research field approaches maturity, theoretical elaboration is crucial for assessing the current state of knowledge and identifying pathways for future research. The main objective of the paper is to scrutinize the academic literature on standard‐based environmental management, with a focus on identifying organizational and management theories that contributed to the development of the field in the last decades. By critically analyzing 55 papers, the study points out eight dominant theoretical frameworks, mostly pertaining to the field of strategic management. The paper provides an in‐depth analysis of the objectives and findings of each study in the light of its theory of reference in order to contribute insights on the current state of theoretical elaboration of standard‐based environmental management systems research.

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The effect of the ISO-14001 environmental management system on corporate financial performance

Cited by 22 publications

References 15 publications

Impact of environmental policy on firm's market performance: The case of ISO 14001

Impact of environmental policy on firm's market performance: The case of ISO 14001

Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis

Organization and management theories in environmental management systems research: A systematic literature review

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