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Going beyond environmental regulations—The influence of firm size on the effect of green practices on corporate financial performance

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  • Nor'Aini Yusof
  • Amin Akhavan Tabassi
  • Muneera Esa

Abstract

Despite the various environmental regulations to address the negative effect of construction activities on the environment, the construction sector is still slow to implement green practices (GPs). To encourage construction firms to implement GPs, these firms should be convinced that GPs are a financially viable endeavour. This paper aimed to analyse the influence of GPs on corporate financial performance (CFP) and investigate whether firm size influences that effect. A survey was employed to gather information from Malaysian construction firms, and the data were analysed using partial least squares structural equation modelling. The findings indicate that green supplier management, green subcontractor management, and green project management have significant effects on CFP and that large firms with high levels of green business practices and green project management attained higher CFP than small and medium enterprises. Policymakers and managers should take a flexible approach to boost GPs in the construction industry.

Suggested Citation

  • Nor'Aini Yusof & Amin Akhavan Tabassi & Muneera Esa, 2020. "Going beyond environmental regulations—The influence of firm size on the effect of green practices on corporate financial performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 32-42, January.
    • Handle: RePEc:wly:corsem:v:27:y:2020:i:1:p:32-42
    DOI: 10.1002/csr.1771
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    2. Farooq, Umar & Wen, Jun & Tabash, Mosab I. & Fadoul, Modawi, 2024. "Environmental regulations and capital investment: Does green innovation allow to grow?," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 878-893.
    3. Pedro Teixeira & Arnaldo Coelho & Pedro Fontoura & José Carlos Sá & Francisco J. G. Silva & Gilberto Santos & Luis P. Ferreira, 2022. "Combining lean and green practices to achieve a superior performance: The contribution for a sustainable development and competitiveness—An empirical study on the Portuguese context," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 887-903, July.
    4. Nikolaos S. Trevlopoulos & Thomas A. Tsalis & Konstantinos I. Evangelinos & Konstantinos Ι. Vatalis & Ioannis E. Nikolaou, 2024. "The Role of Environmental Regulatory- and Proactive-Driven Corporate Strategy in Creating Corporate Green Intellectual Capital (GIC) and Environmental Innovation (EI)," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4750-4775, March.
    5. Iñaki Heras‐Saizarbitoria & Olivier Boiral & Alberto Díaz de Junguitu, 2020. "Environmental management certification and environmental performance: Greening or greenwashing?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2829-2841, September.
    6. Nor'Aini Yusof & Amin Akhavan Tabassi & Ernawati Mustafa Kamal, 2020. "Do environmental, economic and reputational advantages strengthen green practices' impact on environmental performance?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2081-2093, September.
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