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Impact of Green Practices on the Financial Performance: A Study of Indian Automobile Companies

Author

Listed:
  • Manjit Kour

    (Chandigarh Group of Colleges, Jhanjeri, Mohali, India)

  • Rajinder Kaur

    (Chandigarh Group of Colleges, Jhanjeri, Mohali, India)

  • Arshan Bhullar

    (Chandigarh Group of Colleges, Jhanjeri, Mohali, India)

  • Ritika Chaudhary

    (Chandigarh Group of Colleges, Jhanjeri, Mohali, India)

Abstract

The green Practices have established a lot of implications in modern business. Green specifies purity through fairness in price, quality and worth in dealings. Green practices focus on producing and promoting products to satisfy the wants and needs of the consumers. Automobile industry is beginning to adopt green practices to get maximum benefit by brand enhancement, long-term cost savings, improved compliance with regulations and to appeal to higher investor interest and talent. But there is still scope and need to participate more in green technologies. In such a situation, the automobile industry is facing dual pressure i.e., to maintain the financial performance of the firm in the long run and to save the environment at the same time. This paper is an effort to analyze the impact of green practices adopted on the financial performance of the automobile companies in India. For this study a structured questionnaire is administered to a sample of 285 supply managers of the automobile industry in India. SEM (Structural Equation Modelling) method is used to analyze the data. In the results, it was found that four factors i.e., Integrated Environmental Management, Eco design, Technology Integration and Green Marketing had positive and significant influence on financial performance of the automobile companies. However, Pollution Prevention and Customer Oriented were found to have no significant influence on automobile companies financial performance.

Suggested Citation

  • Manjit Kour & Rajinder Kaur & Arshan Bhullar & Ritika Chaudhary, 2020. "Impact of Green Practices on the Financial Performance: A Study of Indian Automobile Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 220-226.
    • Handle: RePEc:eco:journ1:2020-05-25
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    References listed on IDEAS

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    1. Paul Lanoie, 2008. "When And Why Does It Pay To Be Green?," CIRANO Papers 2008n-02a, CIRANO.
    2. Lucas, Marilyn T. & Noordewier, Thomas G., 2016. "Environmental management practices and firm financial performance: The moderating effect of industry pollution-related factors," International Journal of Production Economics, Elsevier, vol. 175(C), pages 24-34.
    3. Zhu, Qinghua & Sarkis, Joseph & Lai, Kee-hung, 2008. "Confirmation of a measurement model for green supply chain management practices implementation," International Journal of Production Economics, Elsevier, vol. 111(2), pages 261-273, February.
    4. Stuart L. Hart & Gautam Ahuja, 1996. "Does It Pay To Be Green? An Empirical Examination Of The Relationship Between Emission Reduction And Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 5(1), pages 30-37, March.
    5. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    6. Sarkis, Joseph & Cordeiro, James J., 2001. "An empirical evaluation of environmental efficiencies and firm performance: Pollution prevention versus end-of-pipe practice," European Journal of Operational Research, Elsevier, vol. 135(1), pages 102-113, November.
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    Cited by:

    1. Manjit Kour, 2024. "Understanding the drivers of green consumption: a study on consumer behavior, environmental ethics, and sustainable choices for achieving SDG 12," SN Business & Economics, Springer, vol. 4(9), pages 1-27, September.

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    More about this item

    Keywords

    Green Practices; Financial Performance; Automobile Companies; Eco Design; Integrated Environmental Management; Technology Integration.;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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