How Do Firms Improve Their Environmental Performance?
|Type:||Articles in Refereed Journals (International)|
Firms that "underperform" environmentally are alleged to encounter stakeholder pressures to improve their environmental performance. In this paper, we develop two hypotheses concerning the improvement of the environmental performance of firms. We test these hypotheses using linear dynamic panel-data models, based on a sample of S&P-500 firms for the period 2000-2004. Our findings indicate that firms tend to improve their environmental performance with time, but it takes longer to reduce a firm’s environmental weaknesses than it takes to augment their environmental strengths.