IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i12p3275-d239631.html
   My bibliography  Save this article

Pipeline Accidents and Incidents, Environmental Consciousness, and Financial Performance in the Canadian Energy Industry

Author

Listed:
  • Vincent Denommee-Gravel

    (School of Business, Ajou University, 16499 Suwon, Korea)

  • Kyungho Kim

    (School of Business, Ajou University, 16499 Suwon, Korea)

Abstract

This study employs a balanced panel of data which consists of 1281 firm-year pipeline accidents and incidents at a disaggregate level and 190 firm-year pipeline events at an aggregate level for 19 firms during the observation period between 2007 and 2016. This study examines the relationships among environmental accidents and incidents, environmental consciousness, and financial performance. Given that environmental consciousness acts as an overarching environmental context on the relationship between the accidents, incidents, and financial performance and could be relevant to shareholders to identify the weight of these accidents and incidents, this study carefully investigates how environmental consciousness moderates the relationship between pipeline accidents, incidents, and financial performance. This study applies the theoretical assumption of both corporate social responsibility (CSR) and corporate social irresponsibility, both of which explain the relationship between financial performance and the events that positively or negatively affect stakeholders. This study employs nested regression analyses with the fixed effects model to test the time-series panel data. The results show that environmental consciousness has an expected significant negative effect on financial performance, whereas pipeline accidents and incidents have no expected negative effect on financial performance. One surprising finding is that pipeline accidents and incidents weighted with environmental consciousness present a significant positive relationship with financial performance, suggesting that potential contextual factors should be considered to explain such an unexpected finding.

Suggested Citation

  • Vincent Denommee-Gravel & Kyungho Kim, 2019. "Pipeline Accidents and Incidents, Environmental Consciousness, and Financial Performance in the Canadian Energy Industry," Sustainability, MDPI, vol. 11(12), pages 1-17, June.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:12:p:3275-:d:239631
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/12/3275/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/12/3275/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Blacconiere, Walter G. & Patten, Dennis M., 1994. "Environmental disclosures, regulatory costs, and changes in firm value," Journal of Accounting and Economics, Elsevier, vol. 18(3), pages 357-377, November.
    3. Charles H. Cho & Martin Freedman & Dennis M. Patten, 2012. "Corporate disclosure of environmental capital expenditures," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 25(3), pages 486-507, March.
    4. J.C. Bosch & E. Woodrow Eckard & Insup Lee, 1998. "EPA enforcement, firm response strategies, and stockholder wealth: an empirical examination," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 167-177.
    5. Kyungho Kim, 2018. "Proactive versus Reactive Corporate Environmental Practices and Environmental Performance," Sustainability, MDPI, vol. 10(1), pages 1-19, January.
    6. Vanessa M Strike & Jijun Gao & Pratima Bansal, 2006. "Being good while being bad: social responsibility and the international diversification of US firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 850-862, November.
    7. Kristel Buysse & Alain Verbeke, 2003. "Proactive environmental strategies: a stakeholder management perspective," Strategic Management Journal, Wiley Blackwell, vol. 24(5), pages 453-470, May.
    8. Mehran, Hamid, 1995. "Executive compensation structure, ownership, and firm performance," Journal of Financial Economics, Elsevier, vol. 38(2), pages 163-184, June.
    9. Christoph Trumpp & Thomas Guenther, 2017. "Too Little or too much? Exploring U‐shaped Relationships between Corporate Environmental Performance and Corporate Financial Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 26(1), pages 49-68, January.
    10. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    11. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    12. Elisabeth Albertini, 2013. "Does Environmental Management Improve Financial Performance? A Meta-Analytical Review," Post-Print halshs-01887802, HAL.
    13. 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.
    14. Garber, Steven & Hammitt, James K., 1998. "Risk Premiums for Environmental Liability: Does Superfund Increase the Cost of Capital?," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 267-294, November.
    15. Nuttaneeya Torugsa & Wayne O’Donohue & Rob Hecker, 2013. "Proactive CSR: An Empirical Analysis of the Role of its Economic, Social and Environmental Dimensions on the Association between Capabilities and Performance," Journal of Business Ethics, Springer, vol. 115(2), pages 383-402, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. María Iborra & Marta Riera, 2023. "Corporate social irresponsibility: What we know and what we need to know," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1421-1439, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weiwei Wu & Rizwan Ullah & Syed Jamal Shah, 2020. "Linking Corporate Environmental Performance to Financial Performance of Pakistani Firms: The Roles of Technological capability and Public awareness," Sustainability, MDPI, vol. 12(4), pages 1-18, February.
    2. Timo Busch & Gunnar Friede, 2018. "The Robustness of the Corporate Social and Financial Performance Relation: A Second‐Order Meta‐Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(4), pages 583-608, July.
    3. Markus Hang & Jerome Geyer‐Klingeberg & Andreas W. Rathgeber, 2019. "It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 257-273, February.
    4. Noordewier, Thomas G. & Lucas, Marilyn T., 2020. "On being green and profitable: Does industry context matter?," International Journal of Production Economics, Elsevier, vol. 223(C).
    5. Chen Liu & Dongmin Kong, 2021. "Business strategy and sustainable development: Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 657-670, January.
    6. Markus Hang & Jerome Geyer‐Klingeberg & Andreas Rathgeber & Stefan Stöckl, 2018. "Economic Development Matters: A Meta‐Regression Analysis on the Relation between Environmental Management and Financial Performance," Journal of Industrial Ecology, Yale University, vol. 22(4), pages 720-744, August.
    7. 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.
    8. Christian Dreyer & Nadja Guenster & Jakob Koegst, 2019. "Empirical Evidence on Environmental Performance and Operating Costs," Sustainability, MDPI, vol. 11(13), pages 1-13, June.
    9. Maria Jell‐Ojobor & Aveed Raha, 2022. "Being good at being good—The mediating role of an environmental management system in value‐creating green supply chain management practices," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 1964-1984, July.
    10. Sergio Manrique & Carmen-Pilar Martí-Ballester, 2017. "Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries," Sustainability, MDPI, vol. 9(11), pages 1-30, October.
    11. Binh Do & Uyen Nguyen & Ninh Nguyen & Lester W. Johnson, 2019. "Exploring the Proactivity Levels and Drivers of Environmental Strategies Adopted by Vietnamese Seafood Export Processing Firms: A Qualitative Approach," Sustainability, MDPI, vol. 11(14), pages 1-22, July.
    12. Kounetas, Kostas & Alexopoulos, Elias & Tzelepis, Dimitris, 2016. "Environmental and Financial Performance. Is there a win-win or a win-loss situation? Evidence from the Greek manufacturing," MPRA Paper 80906, University Library of Munich, Germany, revised 19 Jul 2017.
    13. Janine Maniora, 2018. "Mismanagement of Sustainability: What Business Strategy Makes the Difference? Empirical Evidence from the USA," Journal of Business Ethics, Springer, vol. 152(4), pages 931-947, November.
    14. Josep Garcia‐Blandon & David Castillo‐Merino & Nour Chams, 2020. "Sustainable development: The stock market's view of environmental policy," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3273-3285, December.
    15. Jan Endrikat, 2016. "Market Reactions to Corporate Environmental Performance Related Events: A Meta-analytic Consolidation of the Empirical Evidence," Journal of Business Ethics, Springer, vol. 138(3), pages 535-548, October.
    16. Danso, Albert & Adomako, Samuel & Lartey, Theophilus & Amankwah-Amoah, Joseph & Owusu-Yirenkyi, Diana, 2020. "Stakeholder integration, environmental sustainability orientation and financial performance," Journal of Business Research, Elsevier, vol. 119(C), pages 652-662.
    17. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    18. Eng, Li Li & Fikru, Mahelet G. & Vichitsarawong, Thanyaluk, 2021. "The impact of toxic chemical releases and their management on financial performance," Advances in accounting, Elsevier, vol. 53(C).
    19. Jeremy Galbreath & Chia‐Yang Chang & Daniel Tisch, 2023. "The impact of a proactive environmental strategy on environmentally sustainable practices in service firms: The moderating effect of information use value," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5420-5434, December.
    20. Suhong Li & Thomas Ngniatedema & Fang Chen, 2017. "Understanding the Impact of Green Initiatives and Green Performance on Financial Performance in the US," Business Strategy and the Environment, Wiley Blackwell, vol. 26(6), pages 776-790, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:12:p:3275-:d:239631. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.