Clean Production and Profitability: An Eco-Efficiency Analysis of Kenyan Manufacturing Firms
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Date
2012
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Environment and Development
Abstract
This study examines the linkage between the profitability of firms measured by return
on assets (ROA) and environmental performance measured by eco-efficiency and also
the impact of a good environmental management system (EMS) on profitability and
eco-efficiency of firms. These environmental management practices were captured by
the type of EMS a firm adopts that classified firms as either environmental leaders or
environmental laggards. To achieve this panel data regression model with ROA as the
dependent variable and eco-efficiency scores as the regressors was performed. The
results suggest that there is a potential gain in the profitability of the firm by improving
eco-efficiency in resource use. Furthermore, proactive firms are found to perform
better than reactive firms in terms of profitability and eco-efficiency but firms that
combine both proactive and reactive EMS perform even better, which shows the
benefit of adopting commitment-based approaches alongside the compliance-based
approaches to environmental management.
Description
Keywords
eco-efficiency, environmental management systems, return on assets
Citation
Kamande, M.W. and Lokina, R.B., 2013. Clean Production and Profitability An Eco-efficiency Analysis of Kenyan Manufacturing Firms. The Journal of Environment & Development, 22(2), pp.169-185.