Effect of Corporate Economic Performance on Firm-Level Environmental Performance in a Transition Economy

This paper analyzes the effect of corporate economic performance, as measured by value added, on firm-level environmental performance in a transition economy. In particular, it analyzes this economic performance effect using an unbalanced panel of Czech firms for the years 1995–1998. It assesses whether successful economic performance begets or undermines good environmental performance. This connection seems especially important in transition economies since firms are dramatically restructuring their economic management approaches during transitional periods. A majority of the analytical results indicate that successful economic performance undermines good environmental performance, possibly indicating that more focused managerial efforts to improve economic outcomes may distract efforts to manage environmental matters better.