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Exploring the Direction on the Environmental and Business Performance Relationship at the Firm Level. Lessons from a Literature Review

Listed author(s):
  • Anna Mazzi

    ()

    (Department of Industrial Engineering, University of Padova, Via Marzolo 9, 35131 Padova, Italy)

  • Sara Toniolo

    ()

    (Department of Industrial Engineering, University of Padova, Via Marzolo 9, 35131 Padova, Italy)

  • Alessandro Manzardo

    ()

    (Department of Industrial Engineering, University of Padova, Via Marzolo 9, 35131 Padova, Italy)

  • Jingzheng Ren

    ()

    (Department of Technology and Innovation, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark)

  • Antonio Scipioni

    ()

    (Department of Industrial Engineering, University of Padova, Via Marzolo 9, 35131 Padova, Italy)

Registered author(s):

    The interest of scientists and companies in understanding the business implications of environmental investment is timely; however, a dilemma remains at the firm level: is the environment a “strategic competitive factor”, as in the “Porter point of view”, or is it a “luxury good”, as in the “Wagner point of view”? Our research contributes to this debate through a review of the papers published in scientific journals between 2000 and 2015 that discussed the direction of the relationship between the environmental and business performances of enterprises. The objectives of the research are: (a) to verify if there is an agreement in the scientific literature of the last 15 years about the “Porter–Wagner dilemma” when focusing at the firm level; (b) to underline the prevalent cause and effect directions of the relationship between environmental and business performance; and (c) to investigate the reasons for any disagreements in this topic among the scientists. The results show that the main agreement regards the positive bi-directional relationship, as a virtuous cyclic approach with mutual effects between business and environmental performance; nevertheless, more complex hypotheses emerge, such as nonlinear and/or conditional relationship, that need to be further explored. On the other hand, the Porter–Wagner dilemma remains, and the main reason for the non-agreement among scientists can be due to the several non-homogeneous variables considered in the analyses. Thereafter, as lesson for scientists, the priority is to share univocal methods to measure firms’ environmental and business performances.

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    Article provided by MDPI, Open Access Journal in its journal Sustainability.

    Volume (Year): 8 (2016)
    Issue (Month): 11 (November)
    Pages: 1-25

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    Handle: RePEc:gam:jsusta:v:8:y:2016:i:11:p:1200-:d:83301
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    1. Neuteleers, Stijn & Engelen, Bart, 2015. "Talking money: How market-based valuation can undermine environmental protection," Ecological Economics, Elsevier, vol. 117(C), pages 253-260.
    2. Salzmann, Oliver & Ionescu-somers, Aileen & Steger, Ulrich, 2005. "The Business Case for Corporate Sustainability:: Literature Review and Research Options," European Management Journal, Elsevier, vol. 23(1), pages 27-36, February.
    3. Wagner, Marcus, 2007. "On the relationship between environmental management, environmental innovation and patenting: Evidence from German manufacturing firms," Research Policy, Elsevier, vol. 36(10), pages 1587-1602, December.
    4. Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February.
    5. Heather Dixon-Fowler & Daniel Slater & Jonathan Johnson & Alan Ellstrand & Andrea Romi, 2013. "Beyond “Does it Pay to be Green?” A Meta-Analysis of Moderators of the CEP–CFP Relationship," Journal of Business Ethics, Springer, vol. 112(2), pages 353-366, January.
    6. Taiwen Feng & Dan Wang, 2016. "The Influence of Environmental Management Systems on Financial Performance: A Moderated-Mediation Analysis," Journal of Business Ethics, Springer, vol. 135(2), pages 265-278, May.
    7. Orlitzky, Marc, 2011. "Institutional Logics in the Study of Organizations: The Social Construction of the Relationship between Corporate Social and Financial Performance," Business Ethics Quarterly, Cambridge University Press, vol. 21(03), pages 409-444, July.
    8. Eugen Nicolăescu & Cristina Alpopi & Constantin Zaharia, 2015. "Measuring Corporate Sustainability Performance," Sustainability, MDPI, Open Access Journal, vol. 7(1), pages 1-15, January.
    9. Pieter Jong & Antony Paulraj & Constantin Blome, 2014. "The Financial Impact of ISO 14001 Certification: Top-Line, Bottom-Line, or Both?," Journal of Business Ethics, Springer, vol. 119(1), pages 131-149, January.
    10. Boons, Frank & Wagner, Marcus, 2009. "Assessing the relationship between economic and ecological performance: Distinguishing system levels and the role of innovation," Ecological Economics, Elsevier, vol. 68(7), pages 1908-1914, May.
    11. Cerin, Pontus, 2006. "Bringing economic opportunity into line with environmental influence: A discussion on the Coase theorem and the Porter and van der Linde hypothesis," Ecological Economics, Elsevier, vol. 56(2), pages 209-225, February.
    12. Ching-Hsun Chang, 2011. "The Influence of Corporate Environmental Ethics on Competitive Advantage: The Mediation Role of Green Innovation," Journal of Business Ethics, Springer, vol. 104(3), pages 361-370, December.
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