school

UM E-Theses Collection (澳門大學電子學位論文庫)

check Full Text
Title

The impact of corporate environmental performance on financial performance : evidence from China

English Abstract

There has been a long-standing debate on the relation between corporate environmental performance and financial performance. I hand collect the data concerning the certification status of ISO 14001 environmental management systems (EMS) for China’s listed companies in three heavily polluting industries. I use this ISO certification to proxy for better environmental performance and return on equity (ROE) to measure financial performance. I examine (1) whether improved corporate environmental performance enhances the financial performance; (2) how environmental performance affects financial performance through affecting leverage, profitability (profit margin), and efficiency (asset turnover ratio) drawing on Du Pont analysis. Overall, I find a positive relation between ISO certification and ROE. Furthermore, I find that ISO certification is associated with lower leverage, higher profit margin and higher asset turnover ratio. This suggests that the increases in profitability and efficiency overweight the reduction in leverage, resulting in a net improvement of ROE. My study provides new evidence from China to support the positive relation between environmental performance and financial performance, and has important implications for Chinese policy makers concerning environmental regulations.

Issue date

2012.

Author

Kuang, Mu Zhen

Faculty

Faculty of Business Administration

Department

Department of Finance and Business Economics

Degree

M. Sc.

Subject

Corporate environmental performance

Industrial management -- Environmental aspects

Corporations -- Finance -- China

Files In This Item

TOC & Abstract

Full-text (Intranet only)

Location
1/F Zone C
Library URL
991001820879706306