David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Business Ethics 20 (4):418-432 (2011)
The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non-linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is only positively associated with the financial performance of financially well-performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non-linearity in the link. Based on this result, we discuss implications for the direction of causality.
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References found in this work BETA
Laura J. Spence (1999). Does Size Matter? The State of the Art in Small Business Ethics. Business Ethics 8 (3):163–174.
Marc Orlitzky & John D. Benjamin (2001). Corporate Social Performance and Firm Risk: A Meta-Analytic Review. Business and Society 40 (4):369-396.
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Citations of this work BETA
Marian Eabrasu (2015). Post Hoc Ergo Propter Hoc: Methodological Limits of Performance-Oriented Studies in CSR. Business Ethics: A European Review 24:S11-S23.
Yuhei Inoue & Priscila Alfaro-Barrantes (2015). Pro-Environmental Behavior in the Workplace: A Review of Empirical Studies and Directions for Future Research. [REVIEW] Business and Society Review 120 (1):137-160.
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