Journal of Business Economics

, Volume 89, Issue 7, pp 823–843 | Cite as

The role of firm-internal corporate environmental standards for organizational performance

  • Christian Schwens
  • Marcus WagnerEmail author
Original Paper


Firms’ environmental approaches frequently encompass strategies for pollution prevention and product stewardship. We apply resource-based theorizing to determine how these two strategies affect the likelihood that a firm will adopt firm-internal environmental-management standards and how such standards relate to organizational performance. We find that pollution prevention improves firms’ competitiveness by enabling the implementation of firm-internal standards that subsequently have positive effects on profitability.


Pollution prevention Product stewardship Resource-based view Econometric analysis 

JEL Classification

M16 Q59 L6 



We are grateful for feedback on earlier versions of the manuscript at several international conferences and workshops, especially the 2014 Sino-German Workshop on Corporate Social Responsibility and Corporate Reputation, the 2015 Workshop of the VHB Commission for Sustainability Management and the 2016 Workshop of the VHB Commission for International Management. We also thank two anonymous reviewers and the special issue editor for their valuable feedback.


  1. Aguilera-Caracuel J, Aragón-Correa JA, Hurtado-Torres NE, Rugman AM (2012) The effects of institutional distance and headquarters’ financial performance on the generation of environmental standards in multinational companies. J Bus Ethics 105:461–474. CrossRefGoogle Scholar
  2. Albertini E (2013) Does environmental management improve financial performance? A meta-analytical review. Organ Environ 26(4):431–457CrossRefGoogle Scholar
  3. Aragón-Correa A, Sharma S (2003) A contingent resource-based view of proactive corporate environmental strategy. Acad Manag Rev 28(1):71–88CrossRefGoogle Scholar
  4. Armstrong S, Overton T (1977) Estimating non-response bias in mail surveys. J Mark Res 14:396–402CrossRefGoogle Scholar
  5. Aupperle K, Carroll A, Hatfield J (1985) An empirical examination of the relationship between corporate social responsibility and profitability. Acad Manag J 28(2):446–463Google Scholar
  6. Bansal P, Roth K (2000) Why companies go green: a model of ecological responsiveness. Acad Manag J 43(4):717–736. CrossRefGoogle Scholar
  7. Barney J (1991) Firm resources and sustained competitive advantage. J Manag 17:99–120Google Scholar
  8. Belz F, Strannegard L (1997) International business environmental barometer 1997. Cappelen, OsloGoogle Scholar
  9. Berry MA, Rondinelli DA (1998) Proactive corporate environmental management: a new industrial revolution. Acad Manag Exec 12(2):38–50. CrossRefGoogle Scholar
  10. Boons F, Wagner M (2009) Assessing the relationship between economic and ecological performance: distinguishing system levels and the role of innovation. Ecol Econ 68:1908–1914. CrossRefGoogle Scholar
  11. Bowen D, Ostroff C (2004) Understanding HRM-Firm performance linkages: the role of the “strength” of the HRM system. Acad Manag J 29(2):203–221Google Scholar
  12. Bu M, Wagner M (2016) Racing to the bottom and racing to the top: the crucial role of firm characteristics in foreign direct investment choices. J Int Bus Stud 47(9):1032–1057CrossRefGoogle Scholar
  13. Christmann P (2000) Effects of “best practices” of environmental management on cost advantage: the role of complementary assets. Acad Manag J 43:663–680. CrossRefGoogle Scholar
  14. Clarkson PM, Li Y, Richardson GD, Vasvari FP (2011) Does it really pay to be green? Determinants and consequences of proactive environmental strategies. J Account Public Policy 30:122–144CrossRefGoogle Scholar
  15. Cordeiro J, Sarkis J (1997) Environmental proactivism and firm performance: evidence from security analyst earnings forecasts. Bus Strategy Environ 6:104–134CrossRefGoogle Scholar
  16. Crook TR, Ketchen DJ Jr, Combs JG, Todd SY (2008) Strategic resources and performance: a meta-analysis. Strateg Manag J 29(11):1141–1154. CrossRefGoogle Scholar
  17. Day RM (1998) Beyond eco-efficiency: sustainability as a driver for innovation. WRI, WashingtonGoogle Scholar
  18. Dess GG, Beard DW (1984) Dimensions of organizational task environments. Adm Sci Q 29(1):52–73. CrossRefGoogle Scholar
  19. Dixon-Fowler HR, Slater DJ, Johnson JL, Elstrand AE, Romi AM (2013) Beyond “does it pay to be green?” A meta-analysis of moderators of the CEP-CFP relationship. J Bus Ethics 112(2):353–366CrossRefGoogle Scholar
  20. Dowell G, Hart SL, Yeung B (2000) Do corporate global environmental standards create or destroy market value? Manag Sci 46(8):1059–1074CrossRefGoogle Scholar
  21. Esty D, Porter ME (1998) Industrial ecology and competitiveness. Strategic implications for the firm. J Ind Ecol 2(1):35–43CrossRefGoogle Scholar
  22. Flammer C (2015) Does corporate social responsibility lead to superior financial performance? A regression discontinuity approach. Manag Sci 61(11):2549–2568CrossRefGoogle Scholar
  23. Fowler S, Hope C (2007) Incorporating sustainable business practices into company strategy. Bus Strategy Environ 16:26–38CrossRefGoogle Scholar
  24. Gabriel CA, Bortsie-Aryee N, Apparicio-Farrell N, Farrell E (2018) How do supply chain choices affect the life cycle impacts of medical products? J Clean Prod. CrossRefGoogle Scholar
  25. Govindan K, Rajendran S, Sarkis J, Murugesand P (2015) Multi criteria decision making approaches for green supplier evaluation and selection: a literature review. J Clean Prod 98:66–83CrossRefGoogle Scholar
  26. Greene WH (2003) Econometric analysis. Prentice-Hall, Upper Saddle RiverGoogle Scholar
  27. Hahn R (2013) ISO 26000 and strategic management processes for corporate sustainability and social responsibility. Bus Strategy Environ 22(7):442–455. CrossRefGoogle Scholar
  28. Hart SL (1995) A natural-resource-based view of the firm. Acad Manag Rev 20(4):986–1014. CrossRefGoogle Scholar
  29. Hart SL (1997) Beyond greening: strategies for a sustainable world. Harvard Bus Rev 75:67–76Google Scholar
  30. Hart SL, Ahuja G (1996) Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance. Bus Strategy Environ 5:30–37.;2-Q CrossRefGoogle Scholar
  31. Hart SL, Dowell G (2011) A natural-resource-based view of the firm: fifteen years after. J Manag 37:1464–1479Google Scholar
  32. He J (2006) Pollution haven hypothesis and environmental impacts of foreign direct investment: the case of industrial emission of sulfur dioxide (SO2) in Chinese provinces. Ecol Econ 60:228–245. CrossRefGoogle Scholar
  33. Hoffman AJ (1999) Institutional evolution and change: environmentalism and the U.S. chemical industry. Acad Manag J 42(4):351–371. CrossRefGoogle Scholar
  34. Johnstone N, Labonne J (2009) Why do manufacturing facilities introduce environmental management systems? Improving and/or signaling performance. Ecol Econ 68:719–730. CrossRefGoogle Scholar
  35. Kolk A (2016) The social responsibility of international business: from ethics and the environment to CSR and sustainable development. J World Bus 51(1):23–34CrossRefGoogle Scholar
  36. Kolk A, Van Tulder R (2010) International business, corporate social responsibility and sustainable development. Int Bus Rev 19(2):119–125. CrossRefGoogle Scholar
  37. Lindgreen A, Swaen V, Johnston WJ (2009) Corporate social responsibility: an empirical investigation of U.S. organizations. J Bus Ethics 85:303–323CrossRefGoogle Scholar
  38. Long JS (2002) Regression models for categorical and limited dependent variables. Sage, Thousand OaksGoogle Scholar
  39. Maas S, Schuster T, Hartmann E (2014) Pollution prevention and service stewardship strategies in the third-party logistics industry: effects on firm differentiation and the moderating role of environmental communication. Bus Strategy Environ 23(1):38–55CrossRefGoogle Scholar
  40. Menon A, Menon A (1997) Enviropreneurial marketing strategy: the emergence of corporate environmentalism as market strategy. J Market 61(1):51–67CrossRefGoogle Scholar
  41. Orlitzky M, Schmidt FL, Rynes SL (2003) Corporate social and financial performance: a meta-analysis. Organ Stud 24(3):403–441. CrossRefGoogle Scholar
  42. Papagiannakis G, Voudouris I, Lioukas S (2013) The road to sustainability: exploring the process of corporate environmental strategy over time. Bus Strategy Environ 23(4):254–271CrossRefGoogle Scholar
  43. Porter ME (1980) Competitive strategy. Free Press, New YorkGoogle Scholar
  44. Porter ME, van der Linde C (1995) Toward a new conception of the environment-competitiveness relationship. J Econ Perspect 9(4):97–118CrossRefGoogle Scholar
  45. Reed DJ (1998) Green shareholder value—hype or hit?. World Resources Institute, WashingtonGoogle Scholar
  46. Roodman D (2009) Estimating fully observed recursive mixed-process models with cmp. Center for Global Development, WashingtonCrossRefGoogle Scholar
  47. Russo M, Fouts P (1997) A resource-based perspective on corporate environmental performance and profitability. Acad Manag J 40(3):534–559. CrossRefGoogle Scholar
  48. Sarkis J, Cordeiro J (2001) An empirical evaluation of environmental efficiencies and firm performance: pollution prevention versus end-of-pipe practice. Eur J Oper Res 135:102–113CrossRefGoogle Scholar
  49. Schmalensee R (1989) Inter-industry studies of structure and performance. In: Schmalensee R, Willig RD (eds) Handbook of industrial organization, vol II. North Holland, Amsterdam, pp 951–1009Google Scholar
  50. Sharma S (2001) Different strokes: regulatory styles and environmental strategy in the North-American oil and gas industry. Bus Strat the Environ 10:344–364. CrossRefGoogle Scholar
  51. Shin H, Ellinger AE, Nolan HH, DeCoster TD, Lane F (2018) An assessment of the association between renewable energy utilization and firm financial performance. J Bus Ethics 151(4):1121–1138CrossRefGoogle Scholar
  52. Singh N, Ma J, Yang J (2016) Optimizing environmental expenditures for maximizing economic performance. Manag Decis 54(10):2544–2561CrossRefGoogle Scholar
  53. Sørensen J (2002) The strength of corporate culture and the reliability of firm performance. Adm Sci Q 47:70–91CrossRefGoogle Scholar
  54. Subramony M (2009) A meta-analytic investigation of the relationship between HRM bundles and firm performance. Hum Resour Manag 48(5):745–768. CrossRefGoogle Scholar
  55. Surroca J, Tribó J, Waddock S (2010) Corporate responsibility and financial performance: the role of intangible resources. Strateg Manag J 31:463–490. CrossRefGoogle Scholar
  56. Waddock S, Graves S (1997) The corporate social performance—financial performance link. Strateg Manag J 18:303–319CrossRefGoogle Scholar
  57. Wagner M (2009) Innovation and competitive advantages from the integration of strategic aspects with social and environmental management in European firms. Bus Strategy Environ 18:291–306. CrossRefGoogle Scholar
  58. Wagner M (2010) Corporate social performance and innovation with high social benefit—a quantitative analysis. J Bus Ethics 94(4):581–594. CrossRefGoogle Scholar
  59. Wang Q, Junsheng D, Shenghua J (2015) A meta-analytic review of corporate social responsibility and corporate financial performance: the moderating effect of contextual factors. Bus Soc 55:1–39. CrossRefGoogle Scholar
  60. Wong C, Lai K, Shang K, Lu C, Leung T (2012) Green operation and the moderating role of environmental management capability of suppliers on manufacturing firm performance. Int J Prod Econ 140:283–294CrossRefGoogle Scholar

Copyright information

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

Authors and Affiliations

  1. 1.Heinrich-Heine-University DuesseldorfDüsseldorfGermany
  2. 2.Augsburg UniversityAugsburgGermany

Personalised recommendations