The debate on flexibility of environmental regulations, innovation capabilities and financial performance : a novel use of DEA
By Ramakrishnan Ramanathan, Usha Ramanathan, Yongmei Bentley. 2018
159 citations recorded by the source corpus.
Abstract Operational research models have been employed to understand development issues associated with environmental sustainability. This article describes a novel application of data envelopment analysis (DEA) to help extend a specific debate in the literature on Porter's hypothesis in environmental policy. The debate deals with the impact of flexibility of regulations on the relationship between innovation capabilities on financial performance in organisations. Using the resource based view of a firm, we hypothesise that relationship between innovation capabilities and financial performance in firms depends on how flexible or inflexible environmental regulations are. We apply DEA to capture the flexibility of environmental regulations. Our results indicate that innovation capabilities significantly influence financial performance of firms if firms feel that the environmental regulations they face are flexible and offer more freedom in meeting the requirements of regulations. On the other hand, corporations that feel that they face more inflexible regulations are not so effective in improving their financial performance with their innovation capabilities.
Subfields: Economics and Econometrics, Marketing, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/769be47bb25b2212ed60fc7c72f85c2b949e1085
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In Economics and Econometrics
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In Marketing
In Strategy and Management
Citations in the corpus
- Does China's carbon emissions trading policy improve the technology innovation of relevant enterprises? (2019, methodology): “In addition, the implementation of environmental policies has limited impact in the short term, although the impact of these policies will increase gradually over time (Ramanathan et al., 2018).”