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Beyond “Does it Pay to be Green?” A Meta-Analysis of Moderators of the CEP–CFP Relationship

  • Heather Dixon-Fowler

    ()

  • Daniel Slater

    ()

  • Jonathan Johnson

    ()

  • Alan Ellstrand

    ()

  • Andrea Romi

    ()

Registered author(s):

    Review of extant research on the corporate environmental performance (CEP) and corporate financial performance (CFP) link generally demonstrates a positive relationship. However, some arguments and empirical results have demonstrated otherwise. As a result, researchers have called for a contingency approach to this research stream, which moves beyond the basic question “does it pay to be green?” and instead asks “when does it pay to be green?” In answering this call, we provide a meta-analytic review of CEP–CFP literature in which we identify potential moderators to the CEP–CFP relationship including environmental performance type (e.g., reactive vs. proactive performance), firm characteristics (e.g., large vs. small firms), and methodological issues (e.g., self-report measures). By analyzing these contingencies, this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the CEP–CFP research. Some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms, US firms seem to benefit more than international counterparts, and environmental performance seems to have the strongest influence on market-measures of financial performance. Copyright Springer Science+Business Media B.V. 2013

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    File URL: http://hdl.handle.net/10.1007/s10551-012-1268-8
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    Article provided by Springer in its journal Journal of Business Ethics.

    Volume (Year): 112 (2013)
    Issue (Month): 2 (January)
    Pages: 353-366

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    Handle: RePEc:kap:jbuset:v:112:y:2013:i:2:p:353-366
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    1. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
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    8. Robert D. Klassen & Curtis P. McLaughlin, 1996. "The Impact of Environmental Management on Firm Performance," Management Science, INFORMS, vol. 42(8), pages 1199-1214, August.
    9. Judge, William Q. & Elenkov, Detelin, 2005. "Organizational capacity for change and environmental performance: an empirical assessment of Bulgarian firms," Journal of Business Research, Elsevier, vol. 58(7), pages 893-901, July.
    10. Eden, Lorraine & Levitas, Edward & Martinez, Richard J, 1997. " The Production, Transfer and Spillover of Technology: Comparing Large and Small Multinationals as Technology Producers," Small Business Economics, Springer, vol. 9(1), pages 53-66, February.
    11. Freedman, Martin & Jaggi, Bikki, 1994. "Analysis of the association between pollution performance and input cost factors: The case of electric utility plants," Journal of Accounting and Public Policy, Elsevier, vol. 13(1), pages 31-48.
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