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Impacts of ISO 14001 adoption on firm performance: Evidence from China

Author

Listed:
  • He, Wenlong
  • Liu, Chong
  • Lu, Jiangyong
  • Cao, Jing

Abstract

This paper investigates the impacts of ISO 14001 adoption on the performance of firms using a sample of Chinese firms. The results show that adopting ISO 14001 has insignificant impacts on the financial performance of Chinese firms. A further investigation shows that the adoption of ISO 14001 increases sales and costs of firms in similar magnitudes, thus causes insignificant net effects on the financial performance. Despite negligible financial gains, the adoption of ISO 14001 provides implicit non-financial benefits, such as promoting export and relieving coercive environmental inspections from the government.

Suggested Citation

  • He, Wenlong & Liu, Chong & Lu, Jiangyong & Cao, Jing, 2015. "Impacts of ISO 14001 adoption on firm performance: Evidence from China," China Economic Review, Elsevier, vol. 32(C), pages 43-56.
    • Handle: RePEc:eee:chieco:v:32:y:2015:i:c:p:43-56
    DOI: 10.1016/j.chieco.2014.11.008
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    More about this item

    Keywords

    ISO 14001; Chinese firms; Financial performance; Non-financial benefits;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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