IDEAS home Printed from https://ideas.repec.org/a/umk/journl/v8y2016i2p27-53.html
   My bibliography  Save this article

Environmental Management System and Financial Performance

Author

Listed:
  • Tze San Ong

    (Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia)

  • Boon Heng Teh

    (Faculty of Management, Multimedia University)

  • Sin Huei Ng

    (INTI International University)

  • Wei Ni Soh

    (Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia)

Abstract

The paper aims to explore the relationship between ISO 14001 certification and a company’s financial performance to investigate whether the certification to ISO 14001 environmental management standard has benefited the company’s financial performance or not. Using Malaysia as the research context, the results of a linear regression analysis show that firms with above-average performance have a greater tendency to pursue ISO 14001 certification. The findings also indicate that there is a significant relationship between ISO14001 certification and a company’s financial performance in an emerging economy context. The reason is the adoption of ISO 14001 standard does offers many benefits to companies, such as greater reputation and brand awareness on one hand, and higher sales and investors’ confidence on the other. The ISO 14001 certification helps to develop a better system which leads to costs reduction and revenue increase in the long run.

Suggested Citation

  • Tze San Ong & Boon Heng Teh & Sin Huei Ng & Wei Ni Soh, 2016. "Environmental Management System and Financial Performance," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 8(2), pages 27-53, April.
    • Handle: RePEc:umk:journl:v:8:y:2016:i:2:p:27-53
    as

    Download full text from publisher

    File URL: http://ijie.um.edu.my/filebank/published_article/10066/Environmental%20Management%20System%20and%20Financial%20Performance.pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Yang Liu & Ling Tang, 2024. "Environmental Penalties, Internal and External Governance, and Green Innovation: Does the Deterrence Effect Work?," Sustainability, MDPI, vol. 16(16), pages 1-17, August.
    2. Quang Linh Huynh & Tran Thi Ngoc Lan, 2021. "Importance of Environmentally Managerial Accounting to Environmental and Economic Performance," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 381-388.
    3. Teddy Hikmat Fauzi, 2022. "The Effect of Environmental Performance on Firm Value with Mediating Role of Financial Performance in Manufacturing Companies in Indonesia," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, May.

    More about this item

    Keywords

    Environmental management system; ISO 14001; Malaysia; return on assets; return on equity;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    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:umk:journl:v:8:y:2016:i:2:p:27-53. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Teoh Wern Jun (email available below). General contact details of provider: https://edirc.repec.org/data/feaummy.html .

    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.