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Do Environmental Investments for Production Pay Off? A Study in Vietnam s Small and Medium-sized Enterprises

Author

Listed:
  • Tung Nhu Nguyen

    (Vietnam National University of Ho Chi Minh City, Vietnam,)

  • Gerald Goh Guan Gan

    (Multimedia University, Malaysia,)

  • Seyed Mehrshad Parvin Hosseini

    (Sohar University, Oman)

Abstract

Environmental preservation is one of the top priorities of the United Nations sustainable development goals (SDGs). Environmental investments for production not only demonstrate corporate commitment to these universally accepted goals but also create a safe and healthy work environment for workers. However, previous studies have shown positive and negative effects of environmental investments for production on firm-level labor productivity. This paper aims to investigate how environmental investments for production influence labor productivity in Vietnamese manufacturing small and medium-sized enterprises (SMEs). An analysis of 1,176 valid responses by business owners or managers in Vietnam s manufacturing SMEs shows that environmental investment costs are positively associated with labor productivity. The results also confirm that labor productivity is affected by capital intensity, firm size and firm age. We realize that the impact of environmental investments for production on labor productivity is more advantageous in SMEs with higher capital intensity. Based on these research findings, SME-supporting policies should enable SMEs to get more capital to implement workplace environment investments, which lead to labor productivity and contribute to pollution control.

Suggested Citation

  • Tung Nhu Nguyen & Gerald Goh Guan Gan & Seyed Mehrshad Parvin Hosseini, 2021. "Do Environmental Investments for Production Pay Off? A Study in Vietnam s Small and Medium-sized Enterprises," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 551-559.
    • Handle: RePEc:eco:journ2:2021-06-63
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    References listed on IDEAS

    as
    1. Paul Lanoie, 2008. "When And Why Does It Pay To Be Green?," CIRANO Papers 2008n-02a, CIRANO.
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    More about this item

    Keywords

    environmental investments; labor productivity; small and medium-sized enterprises; Vietnam;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing

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