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The Effect of Environmental Regulations on Financial Performance in Tanzania: A Survey of Manufacturing Companies Quoted on the Dar Es Salaam Stock Exchange

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  • Daniel Linus Naila

    (ST Augustine University of Tanzania, Tanzania)

Abstract

There has been environmental pollution across the globe. Environmental activists are condemning manufacturing companies of environmental pollution. This has led to the establishment of environmental regulations and standards by government authorities across the globe. In complying with environmental regulations companies have found themselves incurring additional cost when compared to those companies which do not comply. However, the effect of compliance to environmental regulations on the financial performance is not clear. This study explores the effects of environmental compliance on the financial performance for listed manufacturing companies in Tanzania. Five listed manufacturing companies were surveyed to obtain data used for the purpose of this study. Specifically, the study intended to establish: the relationship between environmental compliance and financial performance and the effect of environmental compliance on the financial performance. Regression analysis was done to establish the relationship between environmental compliance and financial performance. Findings suggest that there is no significant relationship between environmental compliance and financial performance among listed manufacturing firms in Tanzania. This study concludes that environmental compliance has no significant effect on the financial performance for listed manufacturing firms in Tanzania.

Suggested Citation

  • Daniel Linus Naila, 2013. "The Effect of Environmental Regulations on Financial Performance in Tanzania: A Survey of Manufacturing Companies Quoted on the Dar Es Salaam Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 99-112.
    • Handle: RePEc:eco:journ1:2013-01-10
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    References listed on IDEAS

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    1. Andrew A. King & Michael J. Lenox, 2001. "Does It Really Pay to Be Green? An Empirical Study of Firm Environmental and Financial Performance: An Empirical Study of Firm Environmental and Financial Performance," Journal of Industrial Ecology, Yale University, vol. 5(1), pages 105-116, January.
    2. Hayam Wahba, 2008. "Does the market value corporate environmental responsibility? An empirical examination," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 15(2), pages 89-99, March.
    3. Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
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    Cited by:

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    2. Danquah Jeff Boakye & Ishmael TIngbani & Gabriel Ahinful & Isaac Damoah & Venancio Tauringana, 2020. "Sustainable environmental practices and financial performance: Evidence from listed small and medium‐sized enterprise in the United Kingdom," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2583-2602, September.

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    More about this item

    Keywords

    Environmental regulations; Financial performance; Dar es Salaam stock exchange;
    All these keywords.

    JEL classification:

    • G - Financial Economics
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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