Environmental Science and Pollution Research

, Volume 26, Issue 3, pp 2882–2897 | Cite as

Environmental pollution policy of small businesses in Nigeria and Ghana: extent and impact

  • Uchenna EfobiEmail author
  • Tanankem Belmondo
  • Emmanuel Orkoh
  • Scholastica Ngozi Atata
  • Opeyemi Akinyemi
  • Ibukun Beecroft
Research Article


This study provides a comprehensive assessment of firms’ operation and environmental protection polices in Nigeria and Ghana, where there has been a rising industrial growth amidst low regulatory and institutional frameworks. We analyze the extents to which firms’ adoption of environmental protection policies affect their performances. We use firm-level data of 842 firms (447 for Nigeria and 395 for Ghana) distributed across different regions of both countries for our descriptive and econometric estimations. We find, among other things, that firms’ adoption of internal policies on environmental protection is dismally low in both Nigeria (32%) and Ghana (17%), with policies focused on reducing solid (38%, Nigeria; and 35%, Ghana), gaseous (22%, Nigeria; and 44%, Ghana), and liquid (24%, Nigeria; and 14%, Ghana) pollution. Training appears to be an important intervention that can help improve firms’ adoption of such policies. We also found that firms’ adoption and implementation of environmental protection policies significantly improve their performance.


Environment Green industrialization Performance Pollution Small businesses West Africa 

JEL Classification

H32 L25 Q52 Q53 



This paper is drawn from the comprehensive report on green industrialization in Nigeria and Ghana, which is a funded project by the Institute of African Leadership for Sustainable Development (UONGOZI Institute), Tanzania. We are grateful to the UONGOZI institute for the grant to undertake this project, and for the UONGOZI institute’s scientific committee for their comments on the first draft. Comments from participant at the DIE conference on green transformation and competitive advantage are also acknowledged. Finally, the constructive comments from the two anonymous reviewers are also well appreciated.


  1. Akpan GE, Akpan UF (2012) Electricity consumption, carbon emissions and economic growth in Nigeria. Int J Energy Econ Policy 2(4):292–306Google Scholar
  2. Aliyu BU, Noor ABA (2015) Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies. Social Responsibility Journal 11(4):749–763Google Scholar
  3. Arnold JM, Mattoo A, Narciso G (2008) Services inputs and firm productivity in sub-Saharan Africa: evidence from firm-level data. J Afr Econ 17(4):578–599Google Scholar
  4. Asongu SA (2018a) CO2 emission thresholds for inclusive human development in sub-Saharan Africa. Environ Sci Pollut Res 25:26005–26019. Google Scholar
  5. Asongu SA (2018b) ICT, openness and CO2 emissions in Africa. Environ Sci Pollut Res 25(10):9351–9359Google Scholar
  6. Asongu SA (2018c) Comparative sustainable development in sub-Saharan Africa, Sustainable Development, 1-14,
  7. Asongu SA, El Montasser G, Toumi H (2016) Testing the relationships between energy consumption, CO2 emissions and economic growth in 24 African Countries: a panel ARDL approach. Environ Sci Pollut. Res 23(7):6563–6573Google Scholar
  8. Ayuso S, Navarrete-Báez FE (2017) How does entrepreneurial and international orientation influence SMEs’ commitment to sustainable development? Empirical Evidence from Spain and Mexico. Corp Soc Responsib Environ Manag 25(1):80–94Google Scholar
  9. Bai J, Jayachandran S, Malesky EJ, Olken BA (2017) Firm growth and corruption: empirical evidence from Vietnam. Econ J.
  10. Becker SO, Ichino A (2002) Estimation of average treatment effects based on propensity scores. Stata J 2(4):358–377Google Scholar
  11. Bridge S, O’Neill K, Cromie S (2003) Understanding enterprise, entrepreneurship and small business. 2nd edition. New York. Palgrave Macmillan. ISBN 0-333- 98,465-X.Google Scholar
  12. Caliendo M, Kopeinig S (2008) Some practical guidance for the implementation of propensity score matching. J Econ Surv 22(1):31–72Google Scholar
  13. Chang L, Li W, Lu X (2015) Government engagement, environmental policy, and environmental performance: evidence from the most polluting Chinese listed firms. Bus Strateg Environ 24(1):1–19Google Scholar
  14. Chell E (1985) The entrepreneurial personality: a few ghosts laid to rest? Int Small Bus J 3(3):43–54Google Scholar
  15. Connor SE, Thomas I (2003) Sediments as archives of industrialisation: evidence of atmospheric pollution in Coastal Wetlands of Southern Sydney, Australia. Water Air Soil Pollut 149(1-4):189–210Google Scholar
  16. Currin E (2012) Businesses going green: an analysis of the factors that motivate firms to adopt environmentally friendly practices. 6: 35-50.Google Scholar
  17. De Rosa D, Gooroochurn N, Gorg H (2015) Corruption and productivity: firm-level evidence. Jahrbücher für Nationalökonomie und Statistik 235(2):115–138Google Scholar
  18. Earnhart D (2004) The effects of community characteristics on polluter compliance levels. Land Econ 80(3):408–432Google Scholar
  19. Earnhart D, Lizal L (2007) Effect of pollution control on corporate financial performance in a transition economy. Environmental Policy and Governance 17(4):247–266Google Scholar
  20. Earnhart D, Lizal L (2010) The effect of corporate environmental performance on financial outcomes - profits, revenues, and costs: evidence from the Czech Transition Economy, University of Kansas and William Davidson Institute. Retrieved from Accessed 15 Oct 2018
  21. Earnhart D, Lizal L (2011) The effect of corporate environmental performance on financial outcomes – profits, revenues, and costs: evidence from the Czech Transition Economy, DIME Final Conference, 6-8 April 2011. Retrieved from Accessed 15 Oct 2018
  22. Efobi UR, Orkoh E (2018) Analysis of the impacts of entrepreneurship training on growth performance of firms: quasi-experimental evidence from Nigeria. Journal of Entrepreneurship in Emerging Economies 10(3):524–542Google Scholar
  23. Efobi UR, Tanankem B, Beecroft I (2017) Incentives and firm productivity: exploring multidimensional fiscal incentives in a developing country. World Development Perspectives 5:56–59Google Scholar
  24. Efobi UR, Beecroft I, Belmondo T (2018) Small businesses and the adoption of the Integrated Tax Administration System in Nigeria, International Centre for Tax and Development Working Paper Series, UK, Forthcoming.Google Scholar
  25. Evan M (2015) We can’t ignore the air pollution crisis in Africa’s fast-growing megacities. The Conversation,
  26. Famiyeh S (2017) Corporate social responsibility and firm’s performance: empirical evidence. Social Responsibility Journal 13(2):390–406. Google Scholar
  27. Hallegatte S, Fay M, Vogt-Schilb A (2013) Green industrial policies: when and how. World Bank Policy Research Working Paper WPS6677. World Bank, WashingtonGoogle Scholar
  28. Heckman J, Hidehiko, Todd (1997) Matching as an econometric evaluation estimator: evidence from evaluating a job training program. Rev Econ Stud 64(4):605–654Google Scholar
  29. Karagulian F, Belis CA, Dora CFC, Prüss-Ustün AM, Bonjour S, Adair-Rohani H, Amann M (2015) Contributions to cities' ambient particulate matter (PM): a systematic review of local source contributions at global level. Atmos Environ 120:475–483Google Scholar
  30. Klassen R, McLaughlin C (1996) The impact of environmental management on firm performance. Manag Sci 42(8):1199–1214Google Scholar
  31. Konar S, Cohen M (2001) Does the market value environmental performance? Rev Econ Stat 83(2):281–289Google Scholar
  32. Lalinsky T (2013) Firm competitiveness determinants: results of a panel data analysis, National Bank of Slovenia Working Paper, Nos. 4/2013, Available at Accessed 15 Oct 2018
  33. Lang A, Murphy-Gregory H (2014) Business and sustainability: between government pressure and self-regulation, Springer,
  34. Lopez-Gamero M, Molina-Azorín JF (2016) Environmental management and firm competitiveness: the joint analysis of external and internal elements, long range planning, 49(6): 746-763.Google Scholar
  35. Manrique S, Marti-Ballester C (2017) Analyzing the effect of corporate environmental performance on corporate financial performance in developed and developing countries. Sustainability 9:1–30. Google Scholar
  36. Mbah PO, Nzeadibe TC (2016) Inclusive municipal solid waste management policy in Nigeria: engaging the informal economy in post-2015 development agenda, Local Environment. The International Journal of Justice and Sustainability 22(2):203–224Google Scholar
  37. McArthur J, Teal F (2004) Corruption and firm performance in Africa, Development and Comp Systems 0409015, EconWPA.Google Scholar
  38. McMahon RGP (2001) Growth and performance of manufacturing SMEs: the influence of financial management characteristics. Int Small Bus J 19(3):10–28Google Scholar
  39. Mesquita LF, Lazzarini SG, Cronin P (2007) Determinants of firm competitiveness in Latin American emerging economies: evidence from Brazil’s auto-parts industry. Int J Oper Prod Manag 27(5):501–523. Google Scholar
  40. Newman C, Page J, Rand J, Shimeles A, Söderbom M, Tarp F (2016) Made in Africa: learning to compete in industry. Brookings Institution Press.Google Scholar
  41. OECD (2001) Encouraging Environmental Management in Industry. OECD Publications, ParisGoogle Scholar
  42. Osabuohien ES, Efobi U, Gitau C (2014) Beyond the Environmental Kuznets Curve in Africa: evidence from panel cointegration. J Environ Policy Plan 16(4):517–538Google Scholar
  43. Oyelaran-Oyeyinka B (2007) SME: issues, challenges and prospects. A presentation at the International Conference on Financial System Strategy (FSS) 2020. Organized by the Central Bank of Nigeria in Abuja from 18th to 20th June.Google Scholar
  44. Page J (2016) Commodities, industry, and the African Growth Miracle. Africa in Focus. Available at african-growth-miracle/. Accessed 22 Sept 2018
  45. Partnership for Action on Green Economy - PAGE (2015) Ghana: green industry and trade assessment, UNIDO, Retrieved from Accessed 22 Sept 2018
  46. Qi GY, Zeng SX, Shi JJ, Meng XH, Lin H, Yang QX (2014) Revisiting the relationship between environmental and financial performance in Chinese industry. J Environ Manag 145:349–356Google Scholar
  47. Roe MJ (2013) Political determinants of corporate governance: political context, corporate governance: political context, corporate impact. Oxford University Press, OxfordGoogle Scholar
  48. Rosenbaum PR (2002) Covariance adjustment in randomized experiments and observational studies. Stat Sci 17(3):286–327Google Scholar
  49. Roy R (2016) The cost of air pollution in Africa. OECD Development Centre Working Paper No. 333, OECD Publishing, Paris,
  50. Sharma S (2000) Managerial interpretations and organizational context as predictors of corporate choice of environmental strategy. Acad Manag J 43(4):681–697Google Scholar
  51. Shi H, Zhang L (2006) China’s environmental governance of rapid industrialization. Environmental Politics 15(2):271–292Google Scholar
  52. Stewart WH Jr, Watson WE, Carland JC, Carland JW (1998) A proclivity for entrepreneurship: a comparison of entrepreneurs, small business owners, and corporate managers. J Bus Ventur 14(2):189–214Google Scholar
  53. United Nations Environment Programme (2017) Towards a pollution-free planet background report. United Nations Environment Programme, Nairobi.Google Scholar
  54. United Nations Industrial Development Organization – UNIDO (2011) UNIDO Green industry: policies for supporting green industry. UNIDO, ViennaGoogle Scholar
  55. Wang X, Wang S (2013) Chairman’s government background, excess employment and government subsidies: evidence from Chinese local state-owned enterprises. China Journal of Accounting Research 6(1):51–74Google Scholar
  56. Wichmann J (2016) Africa has an air pollution problem but lacks the data to tackle it Accessed 22 Sept 2018
  57. World Bank (2014) Building competitive green industries: the climate and clean technology opportunity for developing countries. Available at Accessed 15 Oct 2018
  58. World Bank (2016) Doing business 2016: measuring regulatory quality and efficiency. World Bank, WashingtonGoogle Scholar
  59. World Bank (2018) World development indicators. World Bank, WashingtonGoogle Scholar
  60. Yakubu OH (2018) Particle (Soot) Pollution in Port Harcourt Rivers State, Nigeria-double air pollution burden? Understanding and Tackling Potential Environmental Public Health Impacts. Environments 5(1):1–22Google Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Covenant UniversityOtaNigeria
  2. 2.Ministry of Economy, Planning and Regional DevelopmentYaoundéCameroon
  3. 3.North-West UniversityPotchefstroomSouth Africa
  4. 4.World Trade OrganizationGenevaSwitzerland
  5. 5.Federal University of AgricultureAbeokutaNigeria

Personalised recommendations