CERE Working Papers, CERE - the Center for Environmental and Resource Economics
Environmental Performance and Profits
() and Per-Olov Marklund
Abstract: In this study we investigate how firm level environmental
performance (EP) affect firm level economic performance measured as profit
efficiency (PE) in a stochastic profit frontier setting. Analyzing firms in
Swedish manufacturing 1990-2004, results show that EP induced by
environmental policy is not a determinant of PE, while voluntary or
non-policy induced EP seem to have a significant (+) effect on firm PE in
most sectors. The evidence generally supports the idea that good EP is also
good for business, as long as EP is not brought on by policy measures, in
this case a CO2 tax.
Keywords: CO2 tax; environmental performance index; profit efficiency; stochastic frontier analysis; (follow links to similar papers)
JEL-Codes: D20; H23; (follow links to similar papers)
19 pages, February 17, 2012
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