This paper examines the relationship between the environmental and economic performance of firms in the European paper manufacturing industry. Based on panel data, it first investigates the relationship separately, with the analysis based on four hypotheses formulated with regard to country influence, process influence and firm size influence on environmental and economic performance. Hypotheses are tested using pooled regression and a panel regression framework with random firm and temporal effects. The main results of this analysis based on separated regressions are that (i) only for a direct comparison between the UK and Germany, country effects are found to be consistent with the hypotheses, i.e. German firms have better environmental, but worse economic performance than UK firms, (ii) there is a significant sub-sector effect on environmental performance only, (iii) effectively no significant firm size effect can be detected. Subsequent to analysing the relationship separately, the paper estimates the determinants of the relationship between environmental and economic performance using three simultaneous equations systems. It was found that for the system with return on sales as economic performance variable, and an environmental performance index as environmental performance variable, a significant and positive regression coefficient was estimated for the asset-turnover ratio, as well as significant and negative coefficients for the dummy variables representing the industrial and mixed sub-sector. For the system with return on capital employed and the environmental index, significant and positive coefficients were found for the latter, both linear and squared. This last finding fits better with "traditionalist" reasoning about the relationship between environmental and economic performance, which predicts the relationship to be uniformly negative.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg in its series Working Papers of BETA with number
2001-22.
Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Did you know? You can include your works in the database easily by uploading them on the Munich Personal RePEc Archive (MPRA) if you do not have access to an institutional RePEc archive.