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Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

Shoaib Aslam, Mohamed Elmagrhi Orcid Logo, Ramiz Ur Rehman, Collins G. Ntim

Business Strategy and the Environment, Volume: 30, Issue: 4, Pages: 1655 - 1673

Swansea University Author: Mohamed Elmagrhi Orcid Logo

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DOI (Published version): 10.1002/bse.2700

Abstract

This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP), and consequently ascertain whether environmental performance (EP) can mediate the EMPs–FP nexus. Distinctly using data envelopment analysis and generalised method of moments tec...

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Published in: Business Strategy and the Environment
ISSN: 0964-4733 1099-0836
Published: Wiley 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa55737
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Abstract: This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP), and consequently ascertain whether environmental performance (EP) can mediate the EMPs–FP nexus. Distinctly using data envelopment analysis and generalised method of moments techniques to analyse a comprehensive dataset of Nikkei 225 listed firms from 2007 to 2018 (1,920 firm-year observations), our findings first suggest that EMPs have a positive effect on FP. Second, the desired EP can be achieved through the adoption of comprehensive EMPs. Third, improved EP has a substantial impact on shaping the EMPs’ effect on FP. These findings are consistent with the predictions of resource-based view and institutional theories. The results are robust to controlling for different types of alternative measures and endogeneities. The findings have important implications for academics, investors, managers, policy-makers, and regulators.
Keywords: Environmental management practices, environmental performance, financial performance, data envelopment analysis, institutional theory, and resource-based view
College: Faculty of Humanities and Social Sciences
Issue: 4
Start Page: 1655
End Page: 1673

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