Environmentally Friendly Improvements and Financial Effects

How do environmentally conscious businesses compare to their less eco-friendly counterparts when it comes to the bottom line? Dr. Javier Aguilera-Caracuel at Universidad Pablo de Olavide and Dr. Natalia Ortiz-de-Mandojana at University of Granada examine this question in their new article, “Green Innovation and Financial Performance: An Institutional Approach,” recently published in Organization & Environment. Read the abstract below:

Green innovation incorporates technological improvements that save energy, prevent pollution, or enable waste recycling and can include green product design and corporate environmental management. This type of innovation also contributes to business sustainability because it potentially has a positive effect on a firm’s financial, social, and environmental outcomes. However, the specific effect of green innovation on these outcomes can be highly influenced by the national context in which firms develop their activities. Using an institutional approach and employing a sample of 88 green innovative firms and 70 matched pairs (green innovative and non–green innovative firms), we find that green innovative firms are situated in contexts characterized by more stringent environmental regulations and higher environmental normative levels.Nevertheless, when compared to non–green innovative firms, we observe that green innovative firms do not experience improved financial performance. In focusing on green innovative firms, we note that the intensity of green innovation is positively related to firm profitability. Finally, we study whether national institutional conditions (stringency of environmental regulations and normative levels) impose a moderating effect on the relationship between green innovation intensioae coverty  and the financial performance improvement of innovative firms. Our results show that regulatory and normative dimensions do not have the same influence on that relationship, creating implications for academia, managers, and policy makers.

Read the full article here, free to Management INK readers for the next month. Don’t forget to sign up for e-alerts to receive the latest research from Organization & Environment.

This entry was posted in Change, Climate Change, Corporate Social Responsibility, Innovation and tagged , , , by Cynthia Nalevanko, Senior Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Senior Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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