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Environmental and financial performance in the European manufacturing sector: an analysis of extreme tail dependency
journal contribution
posted on 2023-06-09, 19:26 authored by Panagiotis Tzouvanas, Kizys Renatas, Chatziantoniou Ioannis, Sagitova RozaIn this study, we investigate the impact of environmental performance on financial performance. We argue that environmental performance heterogeneously affects firms with different profitability level. Using data for 288 European manufacturing firms over the period 2005-2016, we investigate the said relationship under the financial slack argument and the contrasting paradigms of neoclassical and the instrumental stakeholder theory. Employing a quantile regression framework enriched with a set of instrumental variables to more effectively approximate environmental performance, we find (i) firms with superior environmental performance tend to be more profitable; (ii) the relationship between environmental and financial performance can be characterised as positive and heterogeneous across the conditional distribution; (iii) financial and environmental performance are endogenously related only when high profitability firms are examined.
History
Publication status
- Published
File Version
- Accepted version
Journal
British Accounting ReviewISSN
0890-8389Publisher
ElsevierExternal DOI
Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-10-28First Open Access (FOA) Date
2021-10-25First Compliant Deposit (FCD) Date
2019-10-28Usage metrics
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