Empirical Studies of Self‐Employment

This paper presents a review of empirical studies of self‐employment for the Australian, Canadian, Dutch, UK and US labour markets. Both cross‐sectional and longitudinal studies are analysed. Analyses using cross‐sectional data examine the propensity to be self‐employed at any one point in time, whereas longitudinal studies focus on the transition into self‐employment from wage/salary employment and the survival rate in this state over time. Various hypotheses advanced in the economics and sociology literatures on self‐employment are tested. These include the relationship between managerial ability and the propensity to be self‐employed and the impact of financial constraints on entry into self‐employment stressed in economic models of entrepreneurship, and the relationships between self‐employment choice and the nature of the work and group characteristics (e.g., ethnic enclaves) stressed in sociological models of entrepreneurship. The evidence shows that self‐employment outcomes are significantly affected by factors such as individual abilities, family background, occupational status, liquidity constraints and ethnic enclaves.     

The relationship between environmental information disclosure and firm valuation: the role of corporate governance

Hopwood argued that accounting has become associated with environmental concerns, and that environmental concerns will be further integrated into accounting practices in the near future. The McKinsey Company discovered that environmental information affects a firm’s value, and that investors in firms with good corporate governance in Asian countries are willing to pay a price premium of 20 % or greater. The increasing need for environmental protection and responsibility to the community on the part of firms have led to environmental protection becoming a critical focal concern of governments, public welfare associations, and the public. Effective implementation of corporate governance has been reported to enhance operating performance and increase firm value. This study applies the Ohlson valuation model to examine the value relevance of environmental information disclosure and corporate governance, and investigate their on firms in Taiwan. The results indicate relationships between total disclosure of environmental information, mandatory disclosure of environmental information, and voluntary disclosure of environmental information and firm value. Corporate governance is positively correlated with the valuation of total disclosure of environmental information and mandatory disclosure of environmental information.     

The Impact of Carbon Performance on Climate Change Disclosure

In the light of the significant role of environmental accounting in sustainable development, this study examines whether climate change disclosure reflects a firm's environmental performance. The novelty of the study stands on the approaches adopted to describe environmental performance. The first approach concerns performance in terms of output, direct and indirect greenhouse gas emissions, while the second one is based on environmental intention of mitigating climate change, including climate change policy and emission reduction initiatives. The Climate Performance Leadership Index is employed as a measure for climate change disclosure level, incorporating initiatives contributing to climate change mitigation, adaptation and transparency. Ordered logit regression is the appropriate methodology for the data employed concerning firms listed on FTSE 350. According to our findings, environmental performance for both adopted approaches entails a positive effect on climate change disclosure, a result that is consistent with voluntary disclosure theory. It is inferred that firms cannot manipulate their information reflecting their actual environmental performance and adopting a forthright and factual attitude towards sustainable development. Finally, findings provide an insight into managers' strategic behavior towards climate change issues. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Managing Performance Expectations of Industrial Symbiosis

Firms collaborate on environmental management issues for number of reasons, including cost reduction, risk sharing and managing competition. Industrial symbiosis represents a voluntary collaborative approach among firms in geographic proximity. Companies participating in industrial symbiosis have been found to improve their individual economic and environmental performance, while the regions where they are located are thought to benefit through enhanced environmental quality. However, too few studies have actually investigated whether this is always the case. This paper considers a single case on the island of Puerto Rico, where several firms in a predominantly pharmaceutical manufacturing cluster participated in symbiosis initiatives for several decades. It examines whether early stage symbiotic activities, specifically a shared utility, met technical performance and community expectations for improved environmental quality. Results suggest that collaboration does not necessarily lead to expected environmental performance goals. The paper details the circumstances that led to under‐performance of the initiative and the lessons for symbiosis projects in general. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Disentangling economic crisis effects from environmental regulation effects: Implications for sustainable development

With climate change becoming more severe, policy makers must impose environmental regulations that will lead firms to adopt sustainable corporate models. According to the Porter hypothesis, environmental regulation can favour the implementation of business strategies that improve economic and environmental performances. In this study, we examine how one such form of regulation, the European Union Emission Trading Scheme (EU ETS), impacts firm performance, and we subsequently widen the examination beyond the regulation to evaluate an economic crisis which could potentially confound regulation effects. We estimate a panel model with time- and firm-fixed effects for different subsamples that disentangle the effect of the EU ETS policy from the 2008 economic crisis. The results indicate that the EU ETS policy in its third phase can activate the Porter hypothesis and is effective in fuelling the implementation of sustainable corporate models by firms. However, we also find that the economic crisis neutralises the effects of the regulation on firm performance, precluding the triggering of the Porter hypothesis in severely affected firms.     

Corporate greening and changing regulatory regimes: the UK water industry

This article looks at the relationship between economic regulation, environmental regulation, company strategy and the environment in the UK water and sewerage industry. The regulatory field in this industry, following privatization in 1989, is highly complex and interdependent. The paper presents three case studies of company interpretation of and response to changes in this regulatory field, focusing particularly on the third review by the economic regulator, in 1999, which involved a reduction of the prices companies were allowed to charge their customers. This had significant but complex repercussions for environmental strategy and management in the companies, with different impacts on mandatory and non‐mandatory activities. It also showed in relief the opportunities for building coalitions between companies and the environmental regulator, both in general terms and revolving around specific, local environmental issues and schemes. Companies' strategic direction was also found to have an impact on their response to the regulatory review. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

The setting of voluntary agreements between industry and government: Bargaining and efficiency

This paper aims at providing a preliminary economic analysis of the efficiency of an emerging environmental policy instrument: the so-called voluntary agreement. The use of a data base we have built containing 75 existing agreements in 12 OECD countries allows us to stylise these empirical objects. They are mutually agreed contracts signed between a national administration and a coalition of firms. They include a set of physical pollution reduction objectives to be reached by the firms. According to classical economic categories, they are similar to a traditional policy instrument, i.e. direct regulation, but one which has been devised after an intense negotiation process. As regards efficiency, the key question lies in the impact of such negotiations. In our analytical framework, we distinguish two subjects of negotiation: the collective environmental objective, i.e. the physical amount of pollution to be globally suppressed via the completion of the contract, and the means required to reach the collective objective, i.e. the allocation rule of private pollution reduction objectives. According to these categories a major asymmetry arises in the negotiation structure. When the dominant dimension of the negotiations concerns the environmental objective, firms are clearly opposed to the administration because of their eagerness to obtain as low an objective as possible. In that case, voluntary agreements do not seem to be an original policy approach. They can be compared with classical consultation processes of interested parties when designing new regulations and raise similar questions: the efficiency of information collection and the dangers of regulatory capture. But when the subject being bargained concerns the means to reach environmental objectives which have already been fixed, individual firms become rivals. The logic of such negotiations lies in inter-firm bargaining arbitrated by the administration. Voluntary agreements tend to be an original negotiation-based policy instrument. Decentralised bargaining improves the allocative efficiency.     

The Tracking of Environmental Costs: Motivations and Impacts

Abstract

Most accounting systems separately capture and accumulate one portion of the overall environmental costs of firms, while the remainder is embedded in other cost pools, such as general overhead costs or administrative costs. Little empirical evidence has been provided to explain the impacts of cost accounting systems that make a larger portion of firms' total environmental costs visible. The aim of this study is to conceptually and empirically examine the relationships among the tracking of environmental costs (TEC) by firms, their environmental motivations, and the impacts in terms of environmental and economic performance. Using survey data from a large sample of manufacturing firms, the results suggest two main conclusions. First, the TEC has an indirect influence on economic performance through environmental performance. Second, this indirect effect is influenced by the environmental motivations of the firm. More specifically, this indirect effect is greater (lesser) for firms whose motivations are predominately business-oriented (sustainability-oriented).     

Corporate Sustainability and Economic Performance: an Empirical Analysis of a Voluntary Environmental Program in the USA

Voluntary environmental programs (VEPs) are designed based on a win–win approach to environmental protection that reconciles environmental protection and economic performance. Despite the claims about VEPs, there has been an ongoing debate over their efficacy with regard to whether environmental goals are balanced by economic interests on both theoretical and empirical grounds. To resolve this controversy, this paper empirically investigates a public VEP by the US Environmental Protection Agency: Green Lights (GL). For this, the paper constructs a treatment effects regression model to account for the effects of non‐random assignment for GL participants and non‐participants. The proposed model can simultaneously estimate probit models that predict corporate participation in the GL program and linear models that test the extent to which this participation contributes to economic performance. The results indicate significant positive effects of corporate participation in the GL program on economic performance, providing support for the win–win perspective. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Greenwash: Corporate Environmental Disclosure under Threat of Audit

We develop an economic model of “greenwash,” in which a firm strategically discloses environmental information and an activist may audit and penalize the firm for disclosing positive but not negative aspects of its environmental profile. We fully characterize the model's equilibria, and derive a variety of predictions about disclosure behavior. We rationalize conflicting results in the empirical literature, finding a nonmonotonic relationship between a firm's expected environmental performance and its environmental disclosures. Greater activist pressure deters greenwash, but induces some firms to disclose less about their environmental performance. Environmental management systems discourage firms with poor expected environmental performance from greenwashing, which may justify public policies encouraging firms to adopt them.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Do financial penalties for environmental violations facilitate improvements in corporate environmental performance? An empirical investigation

Environmental regulations play an essential role in managing firm behavior and providing a reference point for the minimum standards of corporate environmental performance, yet certain firms fail to ensure their environmental performance meets these standards. This research focuses on public firms that the US government has penalized for violating environmental regulations and investigates whether these firms subsequently improved their environmental performance. Surprisingly, neither the receipt of a penalty for an environmental violation nor the imposition of a greater penalty was associated with improvements in environmental performance. Instead, a penalty for environmental violation predicted further, albeit mild, deterioration in environmental performance. While the existing literature has established that financial penalties deter most firms from committing environmental violations, this research contributes to this literature by revealing that these penalties fail to motivate firms that have violated environmental regulations to improve their environmental performance.     

Corporate environmentalism strategy in the Spanish consumer product sector: a typology of firms

In recent years, the protection of the environment has gained a growing importance. Accordingly, small and large firms have become aware of their responsibility and begun to develop environmental strategies as an enterprising challenge. In such a situation, this study describes firms' environmental orientation and its impact on the design of corporate and marketing strategies in the Spanish consumer product sector. The purpose of this paper is to identify different groups of firms according to their environmental behaviour. The information was obtained through 81 personal interviews with firms in the final consumer product sector. With the data obtained we have conducted several exploratory and confirmatory factor analyses and a cluster analysis. Findings have proved that there is a specific firm type characterized by certain variables: influence of external forces; environmental orientation; corporative and marketing strategies; size; macro‐sector and, if existing, the environment department. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

A Fresh Approach to Context Influence,Development and Performance in Environmental Management

Respect for the environment has rapidly gained importance in the context of firms, regardless of their pollution levels. Most of the existing research has related to the most polluting sectors and has been limited to the effect that the adoption of cleaner practices has on performance, primarily in terms of operations, financial performance and competitiveness. This paper expands the research towards a more complete picture of environmental management by examining context, development and performance to understand how other factors can influence the development of cleaner practices. In addition, we focus our research on the service sector. In our analysis, we differentiated between the affiliation and size of the studied companies to better understand their specificities. Based on a sample of 374 restaurants, the results show the importance of the influence of institutions and the limited influence of competitors in encouraging firms to adopt a strategic, clean approach, especially for the smallest firms. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Climate Change and Mandatory Carbon Reporting: Impacts on Business Process and Performance

As part of their annual directors' report, UK‐listed companies are now required to disclose their greenhouse gas emissions and account publicly for their contributions to climate change. This paper uses this mandatory carbon reporting to explore wider debates about corporate social responsibility and the purpose, practice, and impacts of such non‐financial reporting. Empirically, it combines documentary analysis of the carbon reporting practices of 176 large firms listed in the FTSE100 and/or subject to the UK government's adaptation reporting power with 60 interviews with stakeholders involved in carbon reporting. Firms disclose their emissions in response to financial incentives, social pressure and/or regulatory compulsion. In turn, rationales shape whether and how carbon reporting influences internal business processes and performance. The importance of reporting to the bottom line varies by sector depending on two variables – energy intensity and economic regulator status – yet there is limited evidence that carbon reporting is driving substantial reductions in emissions. Findings suggest reasons for caution about hopes for ‘nudging’ firms to improve their environmental performance and social responsibility through disclosure requirements.     

The road to cooperative supply‐chain environmental management: trust and uncertainty among pro‐active firms

The pressures on firms to improve their environmental performance have caused them to look outside their boundaries towards their supply chains. In such approaches, firms work with vendors to develop the environmental profile of supplied materials (for example) by reducing materials' toxicity or the amount of packaging used. While large firms can mandate that their suppliers comply with such initiatives, more cooperative approaches are generally likely to be more fruitful. This article presents the results from an exploratory, two phase study of the conditions under which firms engage in cooperative supply‐chain environmental management. First, the authors conducted interviews with 14 leading‐edge firms. In the second phase, the authors conducted a theoretical‐sample survey to examine a model of the antecedents of cooperative supply‐chain environmental management. The results suggest that inter‐firm trust, uncertainty and pro‐active environmental management most directly affect the extent to which firms engage in cooperative supply‐chain environmental management. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

The economic consequences of environmental regulation in China: From a perspective of the environmental protection admonishing talk policy

Environmental regulation may lead to undesired economic consequences. China has tightened its environmental policies to deal with severe environmental pollution in recent years, but existing studies pay little attention to the economic consequences of China's environmental policies. Using the panel data of 211 prefecture‐level and above cities in China from 2003 to 2016, we for the first time estimate the economic impact of the environmental protection admonishing talk (EPAT) policy, a newly implemented environmental regulation policy in China. We use the difference‐in‐differences strategy to identify the economic effects of the EPAT policy combined with the propensity score matching method to control a potential selection problem. The results show that a relative decline occurs in gross domestic product per capita in target cities after the implementation of the EPAT, and the negative impact is exerted on the secondary industry rather than the tertiary industry. Furthermore, we find that target cities respond to the environmental protection requirements of higher authorities through a one‐size‐fits‐all approach of limiting the production activities of industrial enterprises. Meanwhile, the EPAT policy does not improve environmental efficiency. Such findings are instructive for policymakers who need to trade off economic welfare and environmental quality when formulating and implementing new environmental policies.     

The Design of Stable International Environmental Agreements: Economic Theory and Political Economy

International environmental agreements typically strive for the solution of a common property resource dilemma. Since the sovereignty of states precludes external enforcement, international environmental agreements must be self‐enforcing. Game theoretical models explain why rewards and punishments imposed through the environmental externality generally fail to enforce full cooperation. Therefore, environmental treaties incorporate provisions that enhance the incentives for participation such as transfers, sanctions and linkage to other negotiation topics in international politics. Moreover, interaction with markets and governments as well as the rules and procedures adopted in the negotiation process influence the design and the effectiveness of an international environmental agreement.     

Enhancing environmental information transparency through corporate social responsibility reporting regulation

This research aims to contribute to the scientific debate about the lack of interlinkages between mandatory non-financial reporting and sustainable business models. For our purposes, a counter-accounting analysis was conducted on the non-financial reports of a sample of 145 Italian firms interested by the Directive 2014/95/EU effects. Specifically, the study adopts an empirical approach to evaluate environmental information transparency, which represents one of the main critical issues concerning the non-financial declarations prepared by European Italian Public Interest Entities (PIEs) to comply with Directive 2014/95/EU. The results highlight that corporate governance and report characteristics affect environmental transparency. Furthermore, the results confirm the overall attitude to avoid the disclosure of unfavourable or unavailable environmental information through impression management strategies. Finally, the analysis underlines the opportunities for policymakers to rethink mandatory non-financial reporting to sustain the ecological transition of European PIEs.     

Environmental performance and bank lending: Evidence from unlisted firms

Growing public concerns about sustainability and adopting environmentally responsible practices increase risks as well as opportunities for firms and banks. It is unclear whether being environmentally responsible matters for unlisted firms, which are significant contributors to the degradation of the environment but which are not under strict scrutiny like public listed firms. Using a sample of 3915 firms from developing economies, we investigate whether the superior environmental performance of unlisted firms leads them to better loan conditions. After controlling for endogeneity and sample selection bias, we find that firms with better environmental performance received approximately 6.4% higher loans (as a ratio of total sales) and that this effect is more prominent in small and medium firms. This finding supports an information asymmetry view of agency costs. Our results, however, show that environmental performance does not affect loan duration and collateral requirement, indicating no spillover economic effect of corporate environmental performance on loan conditions. This partially supports a new perspective of legitimacy theory in relation to the ‘greenwash strategy’. Overall, our study shows that strategically engaged environmental activities that are integrated with core business objectives represent an important business strategy for firms to enhance credit access.