Which green matters for whom? Greening and firm performance across age and size distribution of firms
Which green matters for whom? Greening and firm performance across age and size distribution of firms
Mili Shrivastava 0 1 2
Jagannadha Pawan Tamvada 0 1 2
0 J. P. Tamvada Centre for India and Global Business, University of Cambridge , Cambridge , UK
1 J. P. Tamvada (
2 M. Shrivastava Department of Leadership, Strategy and Organisations, Faculty of Management, Bournemouth University , Bournemouth, BH8 8EB , UK
3 Southampton Business School, University of Southampton , Highfield Campus, Southampton , UK
A growing body of literature links firm performance with sustainability efforts. We contribute to this literature by developing a novel framework for contextualising greening through the lens of tangibility and visibility of greening activities and examine the impact of different types of greening on firm performance along the age and size distribution of firms. The empirical results based on a large-scale database suggest that rewards to different types of greening differ across age and size distributions.
Green entrepreneurship; Green start-ups; Sustainability; Types of greening; Greening framework; Age and size distribution of firms; Firm growth; Performance
Sustainable development and the role of firms as agents of
sustainable development is a topic of remarkable scholarly
interest. Firms are typically considered as entities with sole
motives of profit maximisation. Although a tradeoff
between profit maximisation and sustainable business
models was traditionally assumed, an emerging body of
research suggests that firms can boost their performance
while pursuing strategies that are considerate towards the
(Hart and Ahuja 1996; Stefan and Paul
. A compelling stream of literature on sustainability
has emerged that primarily focuses on how sustainable
processes can be designed and developed for large
(King and Lenox 2001; Margolis and
Walsh 2001; Stefan and Paul 2008)
. However, young and
small firms can be agents for offering radical solutions to
the challenges of sustainability, as they have an advantage
(Acs and Audretsch 1990)
. In this context,
Klewitz and Hansen (2014)
provide a systematic review of
sustainable innovation practices of small and
mediumsized enterprises and suggest that they innovate differently.
The literature considers a wide range of greening
initiatives of firms such as incorporating environmental
management systems, obtaining compliance certifications,
reducing emissions, and offering green products and
services. However, there is no single framework that
underpins the differences between these greening approaches
and their impact on firm-level performance outcomes. We
bridge this gap by developing a novel greening framework
that consolidates these different greening initiatives using
the lens of their tangibility and visibility to stakeholders.
Furthermore, while several meta-analyses suggest that
there is a positive relationship between green initiatives of
firms and their performance
(Margolis and Walsh 2001;
Orlitzky et al. 2003; Allouche and Laroche 2006; Stefan
and Paul 2008)
, little is known about how they
differentially impact entrepreneurial young firms and mature
incumbents or small and large firms. We bridge this
important gap in the literature by linking different greening
strategies with firm performance across the age and size
distribution of firms. The empirical results based on a
large-scale Eurobarometer database suggest that external
greening activities have a positive impact on the
performance of young firms and small firms. In contrast to this,
internally perceived green processes play a significant role
for middle-aged firms and large incumbent firms.
The paper makes several compelling contributions to
the existing literature. Firstly, building on the input-output
(Busch and Hoffmann 2011; Lannelongue
et al. 2015)
, it presents a novel greening framework for
contextualising greening by firms. Secondly, it provides
the first insights into how different types of greening
impact firm performance along the size and age
distribution of firms. Thirdly, the large-scale database used for the
empirical analysis includes firms from 38 different
economies giving an opportunity to draw broad conclusions
about the impact of greening on firm performance at an
The rest of the paper is organised as follows. Section 2
provides the theoretical background for the paper and
develops the greening framework. The section presents
the hypotheses linking greening initiatives and firm
performance across the age and size distribution of firms.
Section 3 discusses the database and the methodology used
for the empirical analysis. Section 4 presents the empirical
Offering green products and Investing in equipment,
services hiring employees for
Signing up to Environmental Going beyond compliance
Management Systems, requirements, incorporating
Certifications more green processes in
results. Section 5 provides a discussion of the results and
concludes the paper.
2 Theoretical background
The link between environment and business has received
increasing attention in scholarly literature
. Although the question of whether it pays to
be green has been addressed by numerous studies, it is far
from conclusive. While traditionally it was assumed that
addressing environmental concerns of firms’ activities
leads to increased costs for the firms
(Coase 1960; Gray
and Shadbegian 1993; Walley and Whitehead 1994)
emerging body of literature suggests that there may not be
a contradiction between firms’ discharging their
environmental responsibilities and realising their economic goals
(Porter and Van der Linde 1995; Nehrt 1996; Sharma and
Vredenburg 1998; Dowell et al. 2000; Stefan and Paul
2008; Nishitani 2011)
In this context,
Busch and Hoffmann (2011)
that both inputs and outputs relate to firms profits while
Lannelongue et al. (2015)
examine the impact of both
green inputs and green outputs on firm performance.
Their results suggest that green inputs, as well as green
outputs, impact the financial performance of firms. We
take this as a starting point for developing a new
theoretical greening framework that characterises greening
activities of firms as tangible or intangible activities that
are visible externally or internally to the firm.
While some green activities and initiatives of firms are
visible externally, others are internal processes that are
mainly known to their management and employees. For
instance, offering a green product or service in the
marketplace is visible externally while hiring employees
for green tasks is mainly known within the firm. The
former is a tangible output and the latter is a tangible
investment. Similarly, there are intangible green processes
that the external world can be made aware of, for example,
through environmental certifications, and intangible
greening processes that are mainly perceived internally within the
firm such as a firm adopting green processes for its
Figure 1 summarises the greening framework model. In
the first quadrant (Q1), firms have tangible green outputs
that are visible externally. In the second quadrant (Q2),
firms signal to the external world about their intangible
green processes using environmental management systems
and certifications. In the third quadrant (Q3), firms have
tangible investments such as employees hired for greening
related tasks and, in the fourth quadrant (Q4), firms have
intangible greening processes that are known mainly to
their management and employees.1
While a majority of studies support the view that
greening improves firm performance
(Porter and Van der Linde
1995; Hart 1995; Hart and Ahuja 1996; Klassen and
McLaughlin 1996; Sharma and Vredenburg 1998;
Reinhardt 1998; Klassen and Whybark 1999; Dowell
et al. 2000)
, few studies have suggested that it may have
a negative effect
(Cordeiro and Sarkis 1997; Sarkis and
. However, several meta-analyses confirm a
positive link between environmental performance and firm
(Margolis and Walsh 2001; Orlitzky et al.
2003; Allouche and Laroche 2006; Stefan and Paul 2008)
Consistent with the findings of these meta-analyses, we
hypothesise that all forms of greening have a positive
impact on the firm’s performance.
H1a: Externally tangible greening, as well as
intangible greening, have a positive impact on firm
H1b: Internally tangible greening, as well as intangible
greening, have a positive impact on firm performance
However, the ‘who, how and when’ it pays to be green
are compelling questions that go beyond the basic question
of whether it pays to be green. We use the greening
framework conceptualised above to answer these
1 A firm that adopts these will be present in more than one quadrant if it
pursues more than one of the above greening strategies. For example, if
the firm offers greens products in the market place and also has
certifications about its environment initiatives, it has both tangible
and intangible greening processes that are visible externally.
questions along the age and size distribution of firms. In
Hockerts and Wustenhagen (2010)
that a co-evolution of sustainability practices in
entrepreneurial firms and large incumbent firms is more likely to
lead to sustainability at industry level as Emerging Davids
(small entrepreneurial firms) fail to reach broad mass
markets but are more willing to pursue risky innovations
(Coad et al. 2016)
while the sustainability efforts of
Greening Goliaths (large incumbents) are incremental and
(Hamschmidt and Dyllick 2001; Schaltegger
as they face a real risk of cannibalising their market
share (Nicholls and Opal 2005).
While greening may lead to competitive advantage for
large incumbent firms
(King and Lenox 2001; Esty and
, entrepreneurial firms solve problems of
environmental degradation by identifying and exploiting
opportunities resulting from existing market failures
(Cohen and Winn 2007; Dean and McMullen 2007)
do things that incumbent firms and institutions do not
(York and Venkataraman 2010)
. Consistent with
Stenzel and Frenzel (2008)
incumbents reluctantly adopt renewable energy but a
coevolutionary process between regulatory environment
and technology strategies leads to their gradual adoption.
Wüstenhagen et al. (2003)
suggest that while
small firms initially offered green electricity in
Switzerland, large incumbents slowly adopted the strategy of
offering green products at different time points.
Thus, while incumbent firms may be hesitant to
introduce products that cannibalise their existing products as
this may impact their customer base, new entrants are more
likely to identify niches and pursue them aggressively
while undertaking risky innovations
et al. 2016)
. Young firms have a higher probability of
(Huergo and Jaumandreu 2004)
and are more
likely to have a greater R&D intensity than old firms when
entering new markets
(Czarnitzki and Kraft 2004)
having superior technical quality innovations
(Balasubramanian and Lee 2008)
. Thus, green products
and services offered by incumbent firms may not be
radically different from their existing product portfolio,
and producing these products may not have a dramatic
impact on their performance. In contrast to this, the green
products and services offered by new entrants are more
likely to cater to an emerging trend or a niche market and
are more likely to impact firm performance positively.
Djupdal and Westhead (2015)
externally intangible strategies such as certifications
enable very young firms to address the liabilities of newness
and the liabilities of smallness but these are not helpful as
firms grow. Thus, externally tangible green initiatives such
as offering green products or services and externally
intangible green initiatives such as obtaining environmental
certifications are likely to have a positive impact on the
performance of young firms with the impact diminishing
as firms mature. For these reasons, we hypothesise that
external green signals have differential impacts across the
age and size distribution of firms.
H2a: For entrepreneurial firms, external green
strategies have a positive impact on firm performance
H2b: As firms mature, external green strategies
have a decreasing impact on firm performance
As firms undertake internally tangible greening
initiatives such as hiring more green employees or internally
intangible greening initiatives such as going beyond
compliance requirements, they signal to their existing
employees that they are taking proactive steps towards
protecting the environment. This may positively impact
(Temminck et al. 2015)
and lead to an
increased firm performance. These internal greening
processes may result in cost-savings and efficiency gains as
firms mature and, as
Ford et al. (2014)
suggest, firms may
go beyond compliance requirements in pursuit of their
competitive strategy. Consistent with these views,
et al. (2016)
find that proactive engagement with
environmental practices has a positive impact on the performance
of large multinational firms, and
Delmas et al. (2015)
suggest that proactivity in going beyond environmental
compliance requirements has a positive impact on firm
performance in the long run. Furthermore, incumbents
can innovate through processes
or imitate rapidly successful sustainable
. For these reasons, we
hypothesise that tangible, as well as intangible internal
greening, have a positive impact on firm performance
across the age and size distribution of firms.
H3a: For entrepreneurial firms, internal green
strategies have a positive impact on firm performance
H3b: As firms mature, internal green strategies
have a positive impact on firm performance
An important consideration is the potential of firms
engaging in multiple greening strategies. For example,
firms may pursue both tangible and intangible greening
strategies or both internal and external greening
strategies. While on the one hand pursuing multiple
strategies may positively impact the firm, the
multiplicity strategy can also increase the cost of greening for the
firm. Thus, these contrasting effects together determine
whether a firm experiences a net benefit from
simultaneously pursuing multiple greening strategies.
3.1 Data and variables
We use a large-scale database commissioned by the
European Commission, the Eurobarometer survey
Eurobarometer (2012), for testing the hypotheses
developed in Section 2. The data were collected through
telephonic interviews from an international business
register. Firms from 38 different countries were selected
using a stratified sampling procedure.2 Although the
original size of the sample is 13,167 firms, data of the
dependent variable are available for 12,272 observations.
Introducing the four greening strategies variables in the
regression reduces the sample size to 9606 observations.
Adding the firm size variables and the sampling weights
brings the final sample size to 9236 observations.3
3.1.1 Dependent variable
Change in turnover The dependent variable is derived
from a question in the database that asks if the firm’s
turnover has decreased, remained same or increased in
the last 2 years. This is the only measure of firm
performance available in the database. As Table 1 shows,
33.1% of the firms in the sample have experienced a
decrease in turnover, while turnover has remained same
for 26.6% of the firms and turnover has increased for
40% of the firms in the database.
3.1.2 Independent variables
The four different greening processes identified in the
theory section are the main independent variables.
2 The list of countries included in the data collection process is given in
the Appendix in Table 12.
3 The mean values of the variables in the full sample and the final
sample are not statistically different suggesting that exclusion is mostly
random and not systematic.
GS1. Green Product or Service (Tangible-External
Greening) This variable takes value 1 if the firm
offers a green product or service to its customers.
As Table 1 suggests, 30.3% of the firms in the
database offer a green product or service.
GS2. Environmental Management System
(Intangible-External Greening) If a firm has one of the
formalised environmental management systems such
as ISO14001, ISO14064, ISO16000 or others, the
variable takes value 1 and 0 otherwise. Although the
processes underlying these certifications may not be
clear, firms declare these certifications to potential
consumers and they are known externally. As Table 1
suggests 38.6% of firms in the database have
environmental management systems in place.
GS3. Green Jobs Prop. (Tangible-Internal Greening)
This variable is derived from a question in the survey
that asks how many of the full-time employees of the
firm work in green jobs some or all the time.
According to the questionnaire, a ‘green job is one that
directly works with information, technologies, or
materials that preserves or restores environmental quality.
This requires specialised skills, knowledge, training,
or experience.’ As the number of green jobs cannot be
viewed independently of the firm size, a new variable
on the proportion of green jobs is constructed.4 The
mean of this variable is 0.16 suggesting that, on an
average, around 16% of full-time employees are
engaged in green activities.
GS4. Beyond Compliance (Intangible-Internal
Greening) The variable takes value 1 if a firm goes
beyond complying with environmental legislations.
As Table 1 suggests, 26.1% of the firms in the
database proactively go beyond complying with
3.1.3 Control variables
External support We control for the impact of external
support as firms that receive external support are more
likely to have an increased turnover. While half of the
firms in the sample have received no external support,
9.15% have received financial support and 40.50% have
received non-financial support.5
Market type The market type is controlled in the
estimation as the market segment that firms supply to has an
impact on their turnover. While 60.7% of the firm
supply to consumers, 70.2% supply to companies and
4 The exact number of employees is unavailable, and the employee
sizes are coded in intervals such as 0 to 10 employees, 11–50
employees, 50–250 employees, 250–750 employees. We divide the
number of green jobs by the midpoint of these intervals to derive the
5 The question asked in the questionnaire is as follows: ‘Which type of
external support does your company get in relation to its environmental
actions?’. The answers to this question are from the following a. Public
funding (grants or guarantees) b. Private funding from bank or investment
companies c. Venture capital fund d. Advice or other non-financial
assistance from public administration e. Advice or other non-financial assistance
from private consulting and audit companies. f. Advice or other
nonfinancial assistance from business associations. Firms that selected any
one of the a. b. or c. options are classified as having received external
financial support, and firms that selected any one of d. e. or f. are classified
as having received external non-financial support.
30.3% supply to public bodies. Thus, firms in the
sample supply to more than one market segment.
Age, size and sector Following a large body of literature
that suggests that age, size and industrial sector have an
impact on firm growth (Coad 2008), we control for these
effects. The average age of firms in the database is
24.20 years. The standard deviation of the age variable
is 23.59 suggesting that there are several young as well
as mature firms in the database. While 42.5% of the
firms have less than 10 employees, 32.4% of the firms
have more than equal to 10 and less than 50 employees,
18.1% of the firms have more than equal to 50 and less
than 250 employees, and 6.95% of firms have more than
250 employees. The four main industry sectors of
manufacturing, retail, services, and mining with other
related industries are almost equally represented in the
Table 2 presents the correlations between the four
greening variables. Although the correlations are
significant suggesting that firms are engaged in multiple
greening strategies, the correlations are small in
magnitude. Table 3 summarises the adoption of the
greening strategies across the age and size distribution of
firms. In particular, the table suggests that the
proportion of firms engaging in greening strategies
increases along the age distribution and size
distribution of firms. As the first row suggests, while 28.30%
of firms that are less than or equal 10 years old have
introduced a green product or service (GS1), 37.2%
of firms that are older than 50 years have introduced a
green product or service. Similarly, while 28.8% of
firms that have less than 50 employees have
introduced a green product or service (GS1), 39.3% of
firms that have more than 250 employees have
introduced a green product or service. This pattern exists
for all the greening strategies.
3.2 Estimation models
For estimating the impact of the different types of
greening processes on firm performance, ordered probit
models are estimated in Tables 4, 5, 6, and 7, as the
dependent variable is in an ordered form with firms
experiencing a decrease in turnover, having the same
turnover as in the previous period, or having an
increased turnover. The core estimated equation is given
y ¼ α þ β1ðGS1Þ þ β2ðGS2Þ þ β3ðGS3Þ
þ β4ðGS4Þ þ β5ðnumgreenÞ
þ β6ðexternalsupportÞ þ β7ðmarkettypeÞ
þ β8ðfirmageÞ þ β9ðfirmsizeÞ þ β10ðsectorÞ
þ β11ðlocationÞ þ e
Green Product or Service (Tangible-External) 0.164***
Robust standard errors in parentheses
***p < 0.01; **p < 0.05; *p < 0.1
> 50 years
Robust standard errors in parentheses
***p < 0.01; **p < 0.05; *p < 0.1
where GS1–GS4 are the four greening strategies
tangibleinternal and intangible-internal). In addition to these
core independent variables and firm age and size
controls, numgreen controls for the number of green
strategies adopted a firm, externalsupport for
financial and non-financial external support received by a
firm, markettype for the different types of markets a
1 Green Strategy
2 Green Strategies
3 Green Strategies
4 Green Strategies
Robust standard errors in parentheses
***p < 0.01; **p < 0.05; *p < 0.1
firm caters to, sector for the industrial sector and
location for the country of a firm’s geographic location.
4 Empirical results
The empirical results linking the four greening strategies
with firm performance are presented in Table 4. As the
positive and significant coefficient of the ‘Green
Product or Service’ variable in column (1) suggests,
tangibleexternal greening strategy has a positive impact on firm
performance. However, the coefficient of ‘Env. Mang.
Sys.’ in column (2) is insignificant suggesting that an
intangible-external greening strategy has no impact on
firm performance. The coefficients of the internal
greening variables in columns (3) and (4) suggest that both
forms of internal greening have a positive impact on
firm performance. In column (5), all greening variables
are jointly introduced in the estimation, and in column
(6) the number of greening strategies pursued by the
firms is introduced in the estimation as an additional
control. The results in column (6) are consistent with the
results in columns (2), (3), (4), and (5). Thus, the results
partially support hypothesis H1a while strongly
supporting hypothesis H1b.6
The estimated effects of the control variables suggest
that while external financial support and offering
products and services to companies have significantly
positive effects, the number of greening strategies and
nonfinancial support have an insignificant effect on firm
While the empirical results in Table 4 suggest that
greening strategies have a positive impact on firm
6 The marginal effects of the ordered probit estimation in column
(6) of Table 4 are presented in Table 8 to quantify the estimated
impact of greening strategies on firm performance. The estimated
marginal effects suggest that while introducing a green product or
service increases the likelihood of a firm reporting increased
turnover by 7.4 percentage points, a 1% increase in the
proportion of green employees increases the likelihood of a firm
reporting increased turnover by 4.2 percentage points, and going
beyond compliance requirements increases the likelihood of a
firm reporting increased turnover by 7.9 percentage points. For
brevity, we have not included the marginal effect estimations for
other regressions equations in the paper, but these are available
from the authors. Furthermore, we check for potential biases
resulting from data collection and the robustness of results
presented in Table 3 by excluding firms following all four greening
strategies from the sample in Table 9. The empirical results are
consistent with the results in Table 3, and confirm the robustness
of the results presented in Table 3.
performance, they do not show which type of
greening matters for whom. In Table 5, we examine the
impact for greening on firm performance along the
age distribution to test the hypotheses H2 and H3 in
the context of young, middle-aged and old firms.
Consistent with the hypothesis H2a, the results in
column (1) suggest that having a tangible-external
greening strategy in the form of offering a green
product or service has resulted in an increase in
turnover for young entrepreneurial firms. However,
consistent with hypothesis H2b, the coefficients for
the ‘Tangible-External’ variable in columns (2) and
(3) are insignificant suggesting that tangible-external
greening has no impact on middle-aged and mature
firms. Consistent with the hypothesis H3a, the
internal greening strategies have a positive impact on
firm performance for young firms as suggested by
the positive coefficients on ‘Green Employees
Prop.’ and ‘Beyond Compliance’ variables in
column (1). Although these coefficients are positive
and significant for middle-aged firms, they are
insignificant for the oldest firms suggesting that
internal greening strategies have a positive impact on the
performance for young and middle-aged firms but
not old firms. Thus, the results partially support
In Table 6, the impact of greening strategies on
firm performance is examined along the sized
distribution of the firms in the database to test the
hypotheses H2 and H3 in the context of small,
mid-sized, and large firms. Consistent with the
hypothesis H2a, the results suggest that
tangibleexternal greening strategy has a positive impact on
firm performance for small firms, and consistent
with the hypothesis H2b, the impact of
tangibleexternal greening strategy decreases along the size
distribution. Although it benefits mid-sized firms, it
has no significant impact on the performance of
large firms. Consistent with the hypothesis H3a,
both tangible as well as intangible internal greening
strategies have a positive impact on the
performance of small firms. While they do not have a
significant impact on performance for mid-sized
firms, the internal greening strategies have a
positive impact on the performance of large firms
suggesting that as firms mature, they need to move
from external greening strategies to internal
greening strategies. Thus, the results partially support
An important aspect of the above results is that
they do not explicitly consider firms pursuing
multiple greening strategies. To address this issue, in
Table 7, the impact of following multiple greening
strategies on firm performance is estimated in
column (1). The positive and significant coefficient of
the variable ‘Num. Green Strategies’ suggests that
following multiple greening strategies has a positive
i m p a c t o n f i r m p e r f o r m a n c e . H o w e v e r, c o
introducing the four greening strategies in column
(2) makes the coefficient of the variable ‘Num.
Green Strategies’ insignificant suggesting that the
primary effects of following these greening
strategies are central to explaining the impact of greening
on firm performance. These results are replicated in
columns (3) and (4) that use dummy variables to
indicate the number of greening strategies adopted
by a firm. The results in column (3) suggest that
simultaneously pursuing 3 or 4 greening strategies
has a positive impact on firm performance.
However, these effects disappear once the four greening
strategies are introduced in column (4). Thus, the
results in Table 7 suggest that the primary effects
have a direct impact on firm performance.7
With ever-increasing consciousness about the
envir on m e n t , t he r e i s an i n cr e as i n g d e m a nd f o r
sustainability-driven products and services.
Emerging studies along these lines suggest that sustainable
development can be used by firms as a means of
(Cohen and Winn 2007; Dean and
. This has led to a position that
sustainable development and green practices are
routes to competitive advantage
(Esty and Winston
2009; King and Lenox 2001)
. However, this broad
literature uses several different forms of greening
interchangeably to examine the impact of greening
for competitive advantage and performance. The
7 Table 10 presents a summary table showing the co-occurrence of
multiple greening strategies. To further examine the role of multiplicity
of greening strategies for firm performance and check for robustness of
these results, Table 11 explicitly introduces multiple greening strategies
variables in the estimation. The empirical results are broadly consistent
with the results of Table 7 and suggest that the effects of the four
greening strategies can explain the impact of greening on firm
greening framework model developed in Section 2
provides a basis for underpinning the role of
different types of greening initiatives for firm
performance and shows which type of greening matters
for whom. In particular, the results suggest that
while both external and internal greening strategies
have an impact on firm performance for young firms
and small firms, internal greening strategies are
more important for middle-aged firms and large
Young entrepreneurial firms are more likely to
target an unaddressed niche to increases their
likelihood of survival in the face of competition from
. This potentially
results in the same external greening strategy having a
differential impact on firm performance across the
age distribution. For these young firms,
tangibleexternal greening provides an opportunity to deal
with the liability of newness
Although green product innovation literature
addresses environmental issues explicitly, it is far from
certain whether these products can truly achieve
. In this context, the
results suggest that green product innovation may
be more crucial for entrepreneurial firms than
Furthermore, the results suggest that as firms
mature, they need to change their greening
strategies and shift from external greening to internal
greening activities. One potential cause may be
that as firms mature, they need to undertake
demonstrable internal greening activities to affirm
their green commitments to employees and other
stakeholders. In addition to this, the results suggest
that although firms may follow multiple greening
strategies, the effects of the primary four greening
strategies can directly explain the variation in firm
performance that is attributable to greening.
The main limitation of this study is that the
measure of firm performance is a categorical variable
that measures if a firm’s turnover has decreased,
remained same, or increased over the last 2 years
while the magnitude of this change is not known. A
change over a 2-year period can provide limited
insight into the determinants of firm performance
over a longer time period. This is particularly
relevant as recent research suggests that there is inherent
randomness in firm growth
(Coad et al. 2013)
addition to this, most of the independent variables,
with the exception of the age variable, are
categorical in nature. Future research can overcome these
limitations by using an alternate database that has
continuous data over a longer time period.
Furthermore, future research can examine the impact of
these greening strategies across different industry
sectors and country contexts, particularly with
regard to the multiplicity of greening strategies.
To conclude, the paper presents a novel framework for
contextualising greening by firms through the lens of
tangibility and visibility of its greening activities. By
classifying greening actives as externally tangible,
externally intangible, internally tangible and internally
intangible, the paper provides a compelling tool for examining
how greening activities impact firm performance.
Furthermore, by examining the impact of greening along the age
distribution and the size distribution of firms, the paper
provides novel insights into the role of age and size for the
link between greening and performance.
Robust standard errors in parentheses
***p < 0.01; **p < 0.05, *p < 0.1
The sample excludes firms that reported following all four greening strategies
GS1 Green Product or Service (Tangible-External)
GS2 Env. Mang. Sys (Intangible-External)
GS3 Has Green Employees
GS4 Beyond Compliance (Intangible-Internal)
GS1. Green Product or Service (Tangible-External)
GS2. Env. Mang. Sys (Intangible-External)
GS3. Green Employees Prop. (Tangible-Internal)
GS4. Beyond Compliance (Intangible-Internal)
Acknowledgements We are thankful to two anonymous
reviewers for their constructive suggestions.
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