Corporate Environmental and Economic Performance of Japanese Manufacturing Firms: Empirical Study for Sustainable Development

Hidemichi Fujii, Kazuyuki Iwata, Shinji Kaneko, Shunsuke Managi

Research output: Contribution to journalArticle

85 Citations (Scopus)

Abstract

This study examines the relationship 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 improved capital turnover. 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 firms' environmental behavior and sustainable development.

Original languageEnglish
Pages (from-to)187-201
Number of pages15
JournalBusiness Strategy and the Environment
Volume22
Issue number3
DOIs
Publication statusPublished - Mar 1 2013
Externally publishedYes

Fingerprint

sustainable development
manufacturing
firm
economics
performance
assets
sales
environmental economics
turnover
environmental behavior
environmental performance
Environmental performance
Empirical study
Corporate environmental performance
Sustainable development
Economic performance
Manufacturing firms
Return on assets
indicator
CO2 emissions

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Geography, Planning and Development
  • Strategy and Management
  • Management, Monitoring, Policy and Law

Cite this

Corporate Environmental and Economic Performance of Japanese Manufacturing Firms : Empirical Study for Sustainable Development. / Fujii, Hidemichi; Iwata, Kazuyuki; Kaneko, Shinji; Managi, Shunsuke.

In: Business Strategy and the Environment, Vol. 22, No. 3, 01.03.2013, p. 187-201.

Research output: Contribution to journalArticle

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