Does environmental performance affect financial performance for firms in environmentally sensitive industries? Distinguishing emerging and developed countries – with the moderating role of clean technology.
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This thesis investigates whether environmental performance (EP) affects financial performance (FP) of firms in sensitive industries, with a particular focus on the moderating role of clean technology. Moreover, a distinction is made between emerging and developed countries. By challenging the natural resource-based view theory and neoclassical theory, this research aims to provide insights into the impact of environmental performance on financial performance. The hypotheses are tested on 458 corporations operating in sensitive industries from 2014 to 2022. Our analysis yields several notable findings. First, the results indicate that, in the overall sample, there is no significant relationship between environmental performance and financial performance. However, when considering the differentiation between emerging and developed countries, a positive EP-FP relationship is observed for developed countries, while a negative relationship is found for emerging countries. Furthermore, when incorporating clean technology as a moderating variable, a positive and significant association between EP and ROA is detected for the overall sample. Nevertheless, the presence of clean technology weakens the positive impact of EP on ROA. Interestingly, in the case of emerging countries, clean technology exhibits a positive moderating effect on the negative EP-FP relationship. Thus, clean technology presents a promising avenue for establishing a positive relationship between EP and FP in emerging countries. Overall, these findings underscore the importance of recognizing the distinct dynamics between developed and emerging countries in understanding the EP-FP relationship.