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How does the stakeholder exposure of vertical integration influence environmental performance?

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  • Kraude, Richard
  • Narasimhan, Ram

Abstract

In this study, we examine the relationship between Vertical Integration (VI) and Environmental Performance (EP) to understand the impact of Stakeholder exposure on organizational behavior. We collected data on emissions, environmental initiatives, and financial information in the consumer-packaged goods (CPG) industry from two independent secondary sources between 2002 and 2012. We utilized a financial measure for VI and operationalized EP both with objective measures (carbon emissions and waste) and semi-objective measures (the number of environmental initiatives implemented). We show that highly integrated firms produce less waste and show greater alignment in “saying” (stating objectives publicly) versus “doing” (reducing carbon footprint and waste). Yet, firms also engage in fewer environmental initiatives and do not emit less CO2. Taken together, this provides a more nuanced understanding of the relationship between VI and EP and how organizational pressures influence strategic action.

Suggested Citation

  • Kraude, Richard & Narasimhan, Ram, 2024. "How does the stakeholder exposure of vertical integration influence environmental performance?," International Journal of Production Economics, Elsevier, vol. 267(C).
    • Handle: RePEc:eee:proeco:v:267:y:2024:i:c:s0925527323002980
    DOI: 10.1016/j.ijpe.2023.109066
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