Environmental policies and firm value

Basil Al-Najjar*, Aspioni Anfimiadou

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

88 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 - 1 Jan 2012
Externally publishedYes

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