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Reexamining the Expected Effect of Available Resources and Firm Size on Firm Environmental Orientation: An Empirical Study of UK Firms

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Abstract

An emergent body of literature examined why some firms apply some environmental initiatives while other firms do not take responsibility for their natural environment? Thus, firm environmental orientation (responsiveness and performance) are linked in the literature to several variables. Unfortunately, the relationship between firm environmental orientation and either available resources or firm size showed mixed results and inconclusive evidence. Therefore, the aim of this paper is to show empirically how available resources and firm size can explain differences in firm environmental responsiveness and environmental performance. Econometric results of environmental responsiveness using the logistic regression model demonstrated that firm size does appear to add something unique in explaining differences in environmental responsiveness while available resource can be safely dropped from the model. However, econometric analysis of environmental performance using the maximum-likelihood random effects model showed strong evidence that available resources and firm size are significant predictors of firm environmental performance.

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Abbreviations

AIC:

Akaike Information Criterion

BIC:

Bayesian Information Criterion

BIE:

Business in the Environment

BMAC:

Britain Most Admired Company

CER:

Community and Environmental Responsibility

DEFR:

Department for Environment, Food and Rural Affairs

FAME:

Financial Analysis Made Easy

LR:

likelihood ratio

PIRC:

Pension and Investment Research Consultants

RRC:

raising rivals’ costs

RESET:

regression specification error test

SIC:

standard industrial classification

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Authors and Affiliations

  1. Business Administration Department, Faculty of Commerce, Ain Shams University, Abbassia 11566, Main Campus (Western Division), Cairo, Egypt

    Khaled Elsayed

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  1. Khaled Elsayed
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Correspondence to Khaled Elsayed.

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Dr. Khaled Elsayed has a PhD from the University of Nottingham Business School, UK, where he was a member of staff. He is currently a lecturer of Business Administration and Management at the Faculty of Commerce, Ain Shams University, Cairo, Egypt. His research interests include corporate environmental performance; Ethical behavior, corporate governance, corporate social responsibility, crises management and operations management.

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Elsayed, K. Reexamining the Expected Effect of Available Resources and Firm Size on Firm Environmental Orientation: An Empirical Study of UK Firms. J Bus Ethics 65, 297–308 (2006). https://doi.org/10.1007/s10551-006-6402-z

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