Corporate Environmental and Economic Performance of Japanese Manufacturing Firms: Empirical Study for Sustainable Development

By Hidemichi Fujii, Kazuyuki Iwata, S. Kaneko, Shunsuke Managi. 2013

315 citations recorded by the source corpus.

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.

Subfields: Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/846a47345ab88d7930eba3455a7f61c9a50a7166

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Citations in the corpus

Corporate Carbon and Financial Performance: A Meta‐analysis (2018, background): “Even though new emission abatement technologies emerge, many of them remain too expensive (Fujii et al. 2013).”
Do environmental, social, and governance activities improve corporate financial performance? (2018, background): “Studies that have found an inverted U-shaped relationship between CFP and corporate environmental performance also provide evidence for the nonlinear relationship (Fujii et al., 2013; Trumpp and Guenther, 2017).”
Unraveling the effects of environmental outcomes and processes on financial performance: A non-linear approach (2014, methodology): “These findings corroborate previous research in which carbon emissions were more strongly linked to Tobin’s q than to accounting measures (Busch and Hoffmann, 2011; Fujii et al., 2013).”
Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries (2017, background): “(2013) [26] 3256 Japanese firms’ observations 2001–2008 ROA (1) ROS (2) Capital productivity (3) Environmental efficiency Size, R&D ratio, capital ratio, capital investment Fixed-effects estimator Positive (1) No relation (2, 3)”
Corporate Carbon and Financial Performance Revisited (2020, background): “We also control for capital intensity (Brouwers et al., 2015; Clarkson et al., 2015; Delmas et al., 2015; Fujii et al., 2013; Griffin et al., 2017; Iwata & Okada, 2011; Jung et al., 2014; Wang et al., 2014).”
The Effect of Environmental, Social and Governance Consistency on Economic Results (2016, background): “introducing inter-temporal effects [25], as well as inverted U-shape relationship between dependent and independent variables [63].”