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Corporate environmental and economic performances of Japanese manufacturing firms: Empirical study for sustainable development


  • Fujii, Hidemichi
  • Iwata, Kazuyuki
  • Kaneko, Shinji
  • Managi, Shunsuke


This study examines the relationships between environmental performance and economic performance in Japanese manufacturing firms. The environmental performance indicators include CO2 emissions and the aggregate toxic risk associated with chemical emissions relative to sales. Return on assets (ROA) is used as an indicator of economic performance. We demonstrate that there is a significant, inverted U-shaped relationship between ROA and environmental performance calculated by aggregated toxic risk. We also find that the environmental performance increases ROA through both returns on sales and capital turnover improvement. However, we observe a significant, positive relationship between financial performance and environmental performance based on CO2 emissions. These findings may provide evidence for the consequences of environmental firm behavior and sustainable development.

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  • Fujii, Hidemichi & Iwata, Kazuyuki & Kaneko, Shinji & Managi, Shunsuke, 2012. "Corporate environmental and economic performances of Japanese manufacturing firms: Empirical study for sustainable development," MPRA Paper 39564, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39564

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    References listed on IDEAS

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    Cited by:

    1. Hidemichi Fujii & Shunsuke Managi, 2016. "Trends in corporate environmental management studies and databases," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 265-272, April.
    2. Giulio Cainelli & Massimiliano Mazzanti & Roberto Zoboli, 2013. "Environmental performance, manufacturing sectors and firm growth: structural factors and dynamic relationships," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(4), pages 367-387, October.
    3. Shunsuke Managi & Zheng Zhang & Shinya Horie, 2016. "A real options approach to environmental R&D project evaluation," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(3), pages 359-394, July.
    4. Idoya Ferrero-Ferrero & María Ángeles Fernández-Izquierdo & María Jesús Muñoz-Torres, 2016. "The Effect of Environmental, Social and Governance Consistency on Economic Results," Sustainability, MDPI, Open Access Journal, vol. 8(10), pages 1-16, October.
    5. Kyohei Matsushita & Kota Asano, 2014. "Reducing CO 2 emissions of Japanese thermal power companies: a directional output distance function approach," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(1), pages 1-19, January.
    6. Lee, Ki-Hoon & Min, Byung & Yook, Keun-Hyo, 2015. "The impacts of carbon (CO2) emissions and environmental research and development (R&D) investment on firm performance," International Journal of Production Economics, Elsevier, vol. 167(C), pages 1-11.
    7. Fujii, Hidemichi & Shirakawa, Seiji, 2015. "Decomposition analysis of green chemical technology inventions from 1971 to 2010 in Japan," MPRA Paper 62790, University Library of Munich, Germany.
    8. repec:spr:envpol:v:19:y:2017:i:4:d:10.1007_s10018-016-0168-z is not listed on IDEAS
    9. Kounetas, Kostas & Alexopoulos, Elias & Tzelepis, Dimitris, 2016. "Environmental and Financial Performance. Is there a win-win or a win-loss situation? Evidence from the Greek manufacturing," MPRA Paper 80906, University Library of Munich, Germany, revised 19 Jul 2017.
    10. Hidemichi Fujii & A. George Assaf & Shunsuke Managi & Roman Matousek, 2016. "Did the financial crisis affect environmental efficiency? evidence from the Japanese manufacturing sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 159-168, April.
    11. Misani, Nicola & Pogutz, Stefano, 2015. "Unraveling the effects of environmental outcomes and processes on financial performance: A non-linear approach," Ecological Economics, Elsevier, vol. 109(C), pages 150-160.
    12. María del Mar Miras-Rodríguez & Amalia Carrasco-Gallego & Bernabé Escobar-Pérez, 2015. "Has the CSR engagement of electrical companies had an effect on their performance? A closer look at the environment," Business Strategy and the Environment, Wiley Blackwell, vol. 24(8), pages 819-835, December.
    13. repec:eco:journ2:2017-02-13 is not listed on IDEAS

    More about this item


    Corporate environmental management; Environmental efficiency; CO2 emissions; Toxic chemical substances; Japanese manufacturing firm; Sustainable development;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment

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