IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v29y2020i5p2092-2109.html
   My bibliography  Save this article

Pains and gains of environmental management system certification for the sustainable development of manufacturing companies: Heterogeneous effects of industry peer learning

Author

Listed:
  • Jing Wang
  • Yunshi Mao

Abstract

Environmental sustainability is a growing global concern. Environmental management systems (EMS) could be an effective strategic tool to help firms deal with their sustainable development. However, whether EMS certification pays off financially and how it takes effect can be debated. Thus far, these questions remain largely under‐researched. In particular, the effects of EMS certification on financial performance are inconclusive, and the reasons explaining the effects are underdeveloped. This study aims to enrich the current research by exploring the mediating and moderating roles from the perspective of cost‐efficiency trade‐offs to reveal how EMS certification affects financial performance. Applying a PROCESS procedure analysis and causal mediation analysis to a sample of 1,751 Chinese listed manufacturing firms from 2008 to 2016, this study shows that the effect of EMS certification on firms' financial performance is insignificant because their operating costs burden increases while their marketing efficiency and managerial efficiency improve. For the first time, this study demonstrates the moderating role of industry peer learning, as the mediating effects decrease with the growth of industry peer learning.

Suggested Citation

  • Jing Wang & Yunshi Mao, 2020. "Pains and gains of environmental management system certification for the sustainable development of manufacturing companies: Heterogeneous effects of industry peer learning," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 2092-2109, July.
    • Handle: RePEc:bla:bstrat:v:29:y:2020:i:5:p:2092-2109
    DOI: 10.1002/bse.2489
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.2489
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.2489?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Imai, Kosuke & Strauss, Aaron, 2011. "Estimation of Heterogeneous Treatment Effects from Randomized Experiments, with Application to the Optimal Planning of the Get-Out-the-Vote Campaign," Political Analysis, Cambridge University Press, vol. 19(1), pages 1-19, January.
    2. Pekovic, Sanja & Grolleau, Gilles & Mzoughi, Naoufel, 2018. "Environmental investments: Too much of a good thing?," International Journal of Production Economics, Elsevier, vol. 197(C), pages 297-302.
    3. Singh, Neelam & Jain, Suresh & Sharma, Prateek, 2015. "Motivations for implementing environmental management practices in Indian industries," Ecological Economics, Elsevier, vol. 109(C), pages 1-8.
    4. Imai, Kosuke & Keele, Luke & Tingley, Dustin & Yamamoto, Teppei, 2011. "Unpacking the Black Box of Causality: Learning about Causal Mechanisms from Experimental and Observational Studies," American Political Science Review, Cambridge University Press, vol. 105(4), pages 765-789, November.
    5. Naoki Egami & Kosuke Imai, 2019. "Causal Interaction in Factorial Experiments: Application to Conjoint Analysis," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 114(526), pages 529-540, April.
    6. Ullah, Barkat & Wei, Zuobao & Xie, Feixue, 2014. "ISO certification, financial constraints, and firm performance in Latin American and Caribbean countries," Global Finance Journal, Elsevier, vol. 25(3), pages 203-228.
    7. Taiwen Feng & Dan Wang, 2016. "The Influence of Environmental Management Systems on Financial Performance: A Moderated-Mediation Analysis," Journal of Business Ethics, Springer, vol. 135(2), pages 265-278, May.
    8. McGuire, William, 2014. "The effect of ISO 14001 on environmental regulatory compliance in China," Ecological Economics, Elsevier, vol. 105(C), pages 254-264.
    9. Jun Xie & Wataru Nozawa & Michiyuki Yagi & Hidemichi Fujii & Shunsuke Managi, 2019. "Do environmental, social, and governance activities improve corporate financial performance?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 286-300, February.
    10. Lam, Hugo K.S. & Yeung, Andy C.L. & Cheng, T.C.E. & Humphreys, Paul K., 2016. "Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors," International Journal of Production Economics, Elsevier, vol. 180(C), pages 48-56.
    11. Fujii, Hidemichi & Managi, Shunsuke, 2019. "Decomposition analysis of sustainable green technology inventions in China," Technological Forecasting and Social Change, Elsevier, vol. 139(C), pages 10-16.
    12. Wagner, Marcus, 2015. "A European perspective on country moderation effects: Environmental management systems and sustainability-related human resource benefits," Journal of World Business, Elsevier, vol. 50(2), pages 379-388.
    13. Frondel, Manuel & Krätschell, Karoline & Zwick, Lina, 2018. "Environmental management systems: Does certification pay?," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 14-24.
    14. Giorgos Papagiannakis & Irini Voudouris & Spyros Lioukas & George Kassinis, 2019. "Environmental management systems and environmental product innovation: The role of stakeholder engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 939-950, September.
    15. Sang M. Lee & Yonghwi Noh & Donghyun Choi & Jin Sung Rha, 2017. "Environmental Policy Performances for Sustainable Development: From the Perspective of ISO 14001 Certification," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(2), pages 108-120, March.
    16. Peter Demerjian & Baruch Lev & Sarah McVay, 2012. "Quantifying Managerial Ability: A New Measure and Validity Tests," Management Science, INFORMS, vol. 58(7), pages 1229-1248, July.
    17. He, Wenlong & Liu, Chong & Lu, Jiangyong & Cao, Jing, 2015. "Impacts of ISO 14001 adoption on firm performance: Evidence from China," China Economic Review, Elsevier, vol. 32(C), pages 43-56.
    18. Dieudonne Alemagi & Pius M. Oben & Jürgen Ertel, 2006. "Implementing environmental management systems in industries along the Atlantic coast of Cameroon: drivers, benefits and barriers," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 13(4), pages 221-232, September.
    19. Joseph Sarkis & Qingyun Zhu, 2018. "Environmental sustainability and production: taking the road less travelled," International Journal of Production Research, Taylor & Francis Journals, vol. 56(1-2), pages 743-759, January.
    20. Andrea Chiarini, 2019. "Factors for succeeding in ISO 14001 implementation in Italian construction industry," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 794-803, July.
    21. Olivier Boiral & Yves Gendron, 2011. "Sustainable Development and Certification Practices: Lessons Learned and Prospects," Business Strategy and the Environment, Wiley Blackwell, vol. 20(5), pages 331-347, July.
    22. Reale, Ricardo & Ribas, Luiz César & Borsato, Regiane & Magro, Teresa Cristina & Voigtlaender, Maureen, 2016. "The LIFE certification methodology as a diagnostic tool of the environmental management system of the automotive industry," Environmental Science & Policy, Elsevier, vol. 57(C), pages 101-111.
    23. Jonas Ammenberg & Olof Hjelm, 2003. "Tracing business and environmental effects of environmental management systems—a study of networking small and medium‐sized enterprises using a joint environmental management system," Business Strategy and the Environment, Wiley Blackwell, vol. 12(3), pages 163-174, May.
    24. Lo, Chris K.Y. & Yeung, Andy C.L. & Cheng, T.C.E., 2012. "The impact of environmental management systems on financial performance in fashion and textiles industries," International Journal of Production Economics, Elsevier, vol. 135(2), pages 561-567.
    25. Hidemichi Fujii & Kazuyuki Iwata & Shinji Kaneko & Shunsuke Managi, 2013. "Corporate Environmental and Economic Performance of Japanese Manufacturing Firms: Empirical Study for Sustainable Development," Business Strategy and the Environment, Wiley Blackwell, vol. 22(3), pages 187-201, March.
    26. Yunshi Mao & Jing Wang, 2019. "Is green manufacturing expensive? Empirical evidence from China," International Journal of Production Research, Taylor & Francis Journals, vol. 57(23), pages 7235-7247, December.
    27. Baghdadi, Ghasan A. & Bhatti, Ishaq M. & Nguyen, Lily H.G. & Podolski, Edward J., 2018. "Skill or effort? Institutional ownership and managerial efficiency," Journal of Banking & Finance, Elsevier, vol. 91(C), pages 19-33.
    28. Nicole Darnall & G. Jason Jolley & Robert Handfield, 2008. "Environmental management systems and green supply chain management: complements for sustainability?," Business Strategy and the Environment, Wiley Blackwell, vol. 17(1), pages 30-45, January.
    29. Tingley, Dustin & Yamamoto, Teppei & Hirose, Kentaro & Keele, Luke & Imai, Kosuke, 2014. "mediation: R Package for Causal Mediation Analysis," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 59(i05).
    30. Pieter Jong & Antony Paulraj & Constantin Blome, 2014. "The Financial Impact of ISO 14001 Certification: Top-Line, Bottom-Line, or Both?," Journal of Business Ethics, Springer, vol. 119(1), pages 131-149, January.
    31. Iñaki Heras‐Saizarbitoria & German Arana & Olivier Boiral, 2016. "Outcomes of Environmental Management Systems: the Role of Motivations and Firms’ Characteristics," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 545-559, December.
    32. Olivier Boiral, 2007. "Corporate Greening Through ISO 14001: A Rational Myth?," Organization Science, INFORMS, vol. 18(1), pages 127-146, February.
    33. Nishitani, Kimitaka, 2009. "An empirical study of the initial adoption of ISO 14001 in Japanese manufacturing firms," Ecological Economics, Elsevier, vol. 68(3), pages 669-679, January.
    34. Joseph Amankwah‐Amoah & Johnny Syllias, 2020. "Can adopting ambitious environmental sustainability initiatives lead to business failures? An analytical framework," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 240-249, January.
    35. Sonja Studer & Richard Welford & Peter Hills, 2006. "Engaging Hong Kong businesses in environmental change: drivers and barriers," Business Strategy and the Environment, Wiley Blackwell, vol. 15(6), pages 416-431, November.
    36. Treacy, Raymond & Humphreys, Paul & McIvor, Ronan & Lo, Chris, 2019. "ISO14001 certification and operating performance: A practice-based view," International Journal of Production Economics, Elsevier, vol. 208(C), pages 319-328.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sebastjan Lazar & Dorota Klimecka-Tatar & Matevz Obrecht, 2021. "Sustainability Orientation and Focus in Logistics and Supply Chains," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    2. Damla Durak Uşar, 2024. "Impact of ISO Certifications on Corporate Financial Performance: Evidence from Istanbul Stock Exchange-Listed Manufacturing Companies," Sustainability, MDPI, vol. 16(16), pages 1-29, August.
    3. Luca Marrucci & Tiberio Daddi, 2022. "The contribution of the Eco‐Management and Audit Scheme to the environmental performance of manufacturing organisations," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1347-1357, May.
    4. Yu Bai & Yuchen Xu & Jianling Jiao, 2022. "Can corporate environmental management benefit from multirelationship social network? An improved maturity model and text mining based on the big data from Chinese enterprises," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5783-5810, April.
    5. Adriana Liute & Maria Rosa De Giacomo, 2022. "The environmental performance of UK‐based B Corp companies: An analysis based on the triple bottom line approach," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 810-827, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rocio Carrillo-Labella & Fatiha Fort & Manuel Parras-Rosa, 2020. "Motives, Barriers, and Expected Benefits of ISO 14001 in the Agri-Food Sector," Sustainability, MDPI, vol. 12(5), pages 1-17, February.
    2. Pablo Arocena & Raquel Orcos & Fedaous Zouaghi, 2021. "The impact of ISO 14001 on firm environmental and economic performance: The moderating role of size and environmental awareness," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 955-967, February.
    3. Hammad Riaz & Abubakr Saeed & Muhammad Saad Baloch & Nasrullah & Zeeshan Ahmad Khan, 2019. "Valuation of Environmental Management Standard ISO 14001: Evidence from an Emerging Market," JRFM, MDPI, vol. 12(1), pages 1-14, January.
    4. Luca Marrucci & Tiberio Daddi, 2022. "The contribution of the Eco‐Management and Audit Scheme to the environmental performance of manufacturing organisations," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1347-1357, May.
    5. Rocio Carillo Labella & Manuel Parras Rosa & Fatiha Fort & Eva María Murgado Armenteros, 2017. "Certification of Quality as a Forerunner of Environmental Sustainability Standards Adoption in the Olive Oil Production Industry," Post-Print hal-01623961, HAL.
    6. Mark Anthony Camilleri, 2022. "The rationale for ISO 14001 certification: A systematic review and a cost–benefit analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 1067-1083, July.
    7. Hernandez-Vivanco, Alfonso & Domingues, Pedro & Sampaio, Paulo & Bernardo, Merce & Cruz-Cázares, Claudio, 2019. "Do multiple certifications leverage firm performance? A dynamic approach," International Journal of Production Economics, Elsevier, vol. 218(C), pages 386-399.
    8. Marco Pesce & Chenyi Shi & Andrea Critto & Xiaohui Wang & Antonio Marcomini, 2018. "SWOT Analysis of the Application of International Standard ISO 14001 in the Chinese Context. A Case Study of Guangdong Province," Sustainability, MDPI, vol. 10(9), pages 1-19, September.
    9. Luca Marrucci & Tiberio Daddi & Fabio Iraldo, 2022. "Do dynamic capabilities matter? A study on environmental performance and the circular economy in European certified organisations," Business Strategy and the Environment, Wiley Blackwell, vol. 31(6), pages 2641-2657, September.
    10. Frederick Kibon Changwony & Anthony Kwabena Kyiu, 2024. "Business strategies and corruption in small‐ and medium‐sized enterprises: The impact of business group affiliation, external auditing, and international standards certification," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 95-121, January.
    11. Qiang Zhang & Yuan Ma & Qiyue Yin, 2019. "Environmental Management Breadth, Environmental Management Depth, and Manufacturing Performance," IJERPH, MDPI, vol. 16(23), pages 1-11, November.
    12. Iñaki Heras‐Saizarbitoria & Olivier Boiral & Alberto Díaz de Junguitu, 2020. "Environmental management certification and environmental performance: Greening or greenwashing?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2829-2841, September.
    13. Marcus Wagner, 2020. "Global governance in new public environmental management: An international and intertemporal comparison of voluntary standards' impacts," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1056-1073, March.
    14. Obey Dzomonda & Olawale Fatoki, 2020. "Environmental Sustainability Commitment and Financial Performance of Firms Listed on the Johannesburg Stock Exchange (JSE)," IJERPH, MDPI, vol. 17(20), pages 1-21, October.
    15. Saeed, Abubakr & Riaz, Hammad & Liedong, Tahiru Azaaviele & Rajwani, Tazeeb, 2022. "The impact of TMT gender diversity on corporate environmental strategy in emerging economies," Journal of Business Research, Elsevier, vol. 141(C), pages 536-551.
    16. Ajay Kumar & Jyotirani Gupta & Niladri Das, 2022. "Revisiting the influence of corporate sustainability practices on corporate financial performance: An evidence from the global energy sector," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3231-3253, November.
    17. Ionut Viorel Herghiligiu & Ioan-Bogdan Robu & Marius Pislaru & Adrian Vilcu & Anca Laura Asandului & Silvia Avasilcăi & Catalin Balan, 2019. "Sustainable Environmental Management System Integration and Business Performance: A Balance Assessment Approach Using Fuzzy Logic," Sustainability, MDPI, vol. 11(19), pages 1-30, September.
    18. Stefan Daniel Armeanu & Georgeta Vintila & Stefan Cristian Gherghina, 2017. "A Cross-Country Empirical Study Towards the Impact of Following ISO Management System Standards on Euro-Area Economic Confidence," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(44), pages 144-144, February.
    19. Ying Zhang & Hongfei Ruan & Guiyao Tang & Li Tong, 2021. "Power of sustainable development: Does environmental management system certification affect a firm's access to finance?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3772-3788, December.
    20. Tiberio Daddi & Iñaki Heras‐Saizarbitoria & Luca Marrucci & Francesco Rizzi & Francesco Testa, 2021. "The effects of green supply chain management capability on the internalisation of environmental management systems and organisation performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(4), pages 1241-1253, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:29:y:2020:i:5:p:2092-2109. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.