Corporate environmental and economic performances of Japanese manufacturing firms: Empirical study for sustainable development

Fujii, Hidemichi and Iwata, Kazuyuki and Kaneko, Shinji and Managi, Shunsuke (2012): Corporate environmental and economic performances of Japanese manufacturing firms: Empirical study for sustainable development. Forthcoming in: Business Strategy and the Environment

Abstract

This study examines the relationships between environmental performance and economic performance in Japanese manufacturing firms. The environmental performance indicators include CO2 emissions and the aggregate toxic risk associated with chemical emissions relative to sales. Return on assets (ROA) is used as an indicator of economic performance. We demonstrate that there is a significant, inverted U-shaped relationship between ROA and environmental performance calculated by aggregated toxic risk. We also find that the environmental performance increases ROA through both returns on sales and capital turnover improvement. However, we observe a significant, positive relationship between financial performance and environmental performance based on CO2 emissions. These findings may provide evidence for the consequences of environmental firm behavior and sustainable development.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate environmental management, Environmental efficiency, CO2 emissions, Toxic chemical substances, Japanese manufacturing firm, Sustainable development
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; L - Industrial Organization > L6 - Industry Studies: Manufacturing; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P28 - Natural Resources ; Energy ; Environment

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