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Financial outcomes of environmental risk and opportunity for US companies
Department of Accounting, Åbo Akademi University, Turku, Finland.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE). (Åbo Akademi University, Finland)
2008 (English)In: Sustainable Development, ISSN 0968-0602, Vol. 16, no 3, 195-212 p.Article in journal (Refereed) Published
Abstract [en]

The study extends previous research on the relation between environmental and financial performance in two ways. First, we recognize that inherent environmental risk differs among industries. Increased levels of industry risk cause companies to have lower market values even if they are more profitable than companies in low risk industries. Second, we decompose the multi-dimensional environmental opportunity construct into dimensions of preparedness and performance. As an extension of previous research on the economic value of environmental performance, we show that the reputational benefits of environmental preparedness mainly increase market value, while environmental performance also can bring operational benefits to financial performance. In high risk or polluting industries, environmental management is costly and reduces the operating performance of companies. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.

Place, publisher, year, edition, pages
John Wiley & Sons, 2008. Vol. 16, no 3, 195-212 p.
Keyword [en]
environmental risk and opportunity, environmental performance and preparedness, return on assets, Tobin's Q, panel data analysis
National Category
Economics and Business
URN: urn:nbn:se:umu:diva-10719DOI: 10.1002/sd.365OAI: diva2:150390


Available from: 2008-10-24 Created: 2008-10-24 Last updated: 2014-12-19

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Semenova, NataliaHassel, Lars
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