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Does corporate R&D investment affect firm environmental performance? Evidence from G-6 countries

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  • Alam, Md. Samsul
  • Atif, Muhammad
  • Chien-Chi, Chu
  • Soytaş, Uğur

Abstract

The rate of climate change due to global warming has become a substantial concern and appeared as a real-world phenomenon in the recent years. However, it is imperative to know how business enterprises alter such concern. Recent studies involve a variety of firm-level factors to create a robust link between business enterprises' environmental and financial performance. However, little is known regarding the role of research and development (R&D) investment on firms' environmental performance. Using a firm-level data for the period 2004–2016 from G-6 countries, this study empirically investigates how R&D investment affects the firm environmental performance measured by energy and carbon emissions intensities. We find that R&D investment improves the firm's environmental performance consistent with the theoretical argument of natural resource-based view (NRBV). Our findings are robust to alternative econometric specifications, alternative variable specifications, and sub-samples. Our findings offer novel insights to the policymakers, business managers, and regulators.

Suggested Citation

  • Alam, Md. Samsul & Atif, Muhammad & Chien-Chi, Chu & Soytaş, Uğur, 2019. "Does corporate R&D investment affect firm environmental performance? Evidence from G-6 countries," Energy Economics, Elsevier, vol. 78(C), pages 401-411.
    • Handle: RePEc:eee:eneeco:v:78:y:2019:i:c:p:401-411
    DOI: 10.1016/j.eneco.2018.11.031
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    More about this item

    Keywords

    Sustainability; Carbon emissions; Energy intensity; Corporate R&D investment;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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