The whole relationship between environmental variables and firm performance: Competitive advantage and firm resources as mediator variables

Abstract

a b s t r a c tThe examination of the possible direct link between environmental protection and firm performance in the literature has generally produced mixed results. The present paper contributes to the literature by using the resource-based view as a mediating process in this relationship. The study specifically tests whether or not the resource-based view of the firm mediates the positive relationships of proactive environmental management and improved environmental performance with competitive advantage, which also has consequences for financial performance. We also check the possible link between the adoption of a pioneering approach and good environmental management practices. Our findings support that early investment timing and intensity in environmental issues impact on the adoption of a proactive environmental management, which in turn helps to improve environmental performance. The findings also show that a firm's resources and competitive advantage act as mediator variables for a positive relationship between environmental protection and financial performance. This contribution is original because the present paper develops a comprehensive whole picture of this path process, which has previously only been partially discussed in the literature. In addition, this study clarifies a relevant point in the literature, namely that the effect of environmental protection on firm performance is not direct and can vary depending on the sector considered. Whereas competitive advantage in relation to costs influences financial performance in the IPPC law sector, the relevant influence in the hotel sector comes from competitive advantage through differentiation.

Entrepreneurial Competency as Determinant for Success of Female Entrepreneurs in Nigeria

“…Competencies enhance competitiveness of their firm in the market regarding cost reduction, brand loyalty, good recommendation by customers and reputation among consumers (López-Gamero et al 2009). Thus, resources and capabilities possessed by the entrepreneurs will provide them the avenue to outperform their competitors and achieve great success in their business endeavours.…”

Environmental Proactivity and Firms’ Performance: Mediation Effect of Competitive Advantages in Spanish Wineries

“…• Differentiation-based competitive advantages (CAD): This variable included four items taken from Banerjee et al [27] and López-Gamero et al [79]. More specifically, in our study, we use loyalty of existing customers, attracting new customers, product image, and corporate image.…”

“…• Financial performance (FP): Following López-Gamero et al [79], Sen et al [81] and Endrikat et al [82], we employed return on asset (ROA), return on equity (ROE), and value-added to measure financial performance.…”

“…In this study, we have used two control variables which are generally accepted by environmental literature [45,79,81]: the size of the company and its age. The size of the company is measured on the basis of two items: number of employees and turnover; and was included to control the effect of scale economies on FP [2].…”

Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance

“…For example, the role of good management skills in translating good environmental actions to profits has been highlighted (Schuler and Cording 2006;Peloza and Papania 2008). The indirect impact of the role of industry sector has been highlighted by Lopez-Gamero et al (2009). For firms with shareholder value-oriented strategies, the relationship between EP and economic performance was more positive than for firms without such a strategy (Wagner and Schaltegger 2004).…”