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Is there a trade‐off between environmental performance and financial resilience? International evidence from the subprime crisis

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  • Sylvain Marsat
  • Guillaume Pijourlet
  • Muhammad Ullah

Abstract

Companies face mounting pressure to be environmentally conscious, yet they simultanously have to cope with more frequent financial crises. Whether environmental performance (EP) improves or mitigates the resilience of a firm when confronted with a financial shock is then of particular importance. Our survival analysis shows that high pre‐crisis EP significantly increased the time of firms’ market price recovery after the subprime crisis. This result suggests that EP appears as an organisational constraint that may limit the ability of firms to be financially resilient. However, in less environmentally oriented countries, EP does not negatively influence a firm’s financial resilience.

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  • Sylvain Marsat & Guillaume Pijourlet & Muhammad Ullah, 2021. "Is there a trade‐off between environmental performance and financial resilience? International evidence from the subprime crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4061-4084, September.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:3:p:4061-4084
    DOI: 10.1111/acfi.12726
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    2. Ullah, Muhammad & Zahid, Muhammad & All-e-Raza Rizvi, Syed Muhammad & Qureshi, Qazi Ghulam Mustafa & Ali, Farman, 2022. "Do green supply chain management practices improve organizational resilience during the COVID-19 crisis? A survival analysis of global firms," Economics Letters, Elsevier, vol. 219(C).
    3. Brice Foulon & Sylvain Marsat, 2023. "Does environmental footprint influence the resilience of firms facing environmental penalties?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6154-6168, December.
    4. Agnieszka Karman & Viktor Prokop & Carlo Giglio & Fazal Ur Rehman, 2024. "Has the Covid‐19 pandemic jeopardized firms' environmental behavior? Bridging green initiatives and firm value through the triple bottom line approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 375-395, January.
    5. Mingjin Luo & Shenqguan Wang, 2023. "Financialization and sluggish recovery of firms' investment: Global evidence from the 2007–2008 financial crisis," International Finance, Wiley Blackwell, vol. 26(3), pages 344-363, December.

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