Environmental Policies and Firm Value

Basil Al-Najjar, Aspioni Anfimiadou,

Research output: Contribution to journalArticle

74 Citations (Scopus)

Abstract

Many organizations are currently becoming more environmentally friendly. Eco-efficiency maximizes the effectiveness of a business operation while reducing its impact on the environment; with the necessary skills, organizations can create more value while using less input. Prior empirical studies have suggested that firms engaging in eco-efficient activities are better valued than those without such activities. Therefore, this will enhance business efficiency and excellence. This study investigates the link between eco-efficiency, as environmental policy, and firm value in the United Kingdom (UK) for the period 1999 to 2008. We generate new insights into environmental–financial performance by using different definitions of the term ‘eco-efficiency’. In the UK context our results support that eco-efficient firms have higher market values than those lacking environmental strategies. Hence, we recommend that firms become involved in environmental polices since the adoption of these polices will have a positive impact on firm value.
Original languageEnglish
Pages (from-to)49-59
Number of pages11
JournalBusiness Strategy and the Environment
Volume21
Issue number1
Early online date27 Apr 2011
DOIs
Publication statusPublished - Jan 2012
Externally publishedYes

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