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The relationship between environmental management performance and financial performance of firms listed in the Alternative Investment Market (AIM) in the UK

The relationship between environmental management performance and financial performance of firms listed in the Alternative Investment Market (AIM) in the UK
The relationship between environmental management performance and financial performance of firms listed in the Alternative Investment Market (AIM) in the UK
This paper examines the relationship between environmental management and SMEs performance. The study adopts General Methods of Moments (GMM) on a sample of 201 quoted Small and Medium Enterprises (SMEs) on the United Kingdom (UK) Alternative Investment Market (AIM) from 2011 to 2016. Consistent with our prediction based on contradictory results of existing studies, the study documents that corporate investment channelled through efficient environmental management translates into superior SME performance. In particular, we find a non-monotonic (inverted U-shaped) relationship between environmental management and financial performance, which suggests that SMEs have an optimal environmental management level that maximises their performance. We find the predictability to be stronger among medium and larger firms, where both ROA and Tobin’s q revealed a significant relationship with environmental performance. The implication of the findings and recommendations are discussed.
Alternative investment market, Environmental management, Financial performance, Natural resource-based view, Small and medium-sized enterprises
0959-6526
Boakye, Jeff Danquah
b8ecffd1-45c4-4be9-8589-d8d1effc03c8
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
Ahinful, Gabriel Sam
a589cb32-b6e2-4d47-b539-5a4fa3ccd32f
Nsor Abala, Randolph
99785457-faa7-4e22-b4f5-674ade6ff22b
Boakye, Jeff Danquah
b8ecffd1-45c4-4be9-8589-d8d1effc03c8
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
Ahinful, Gabriel Sam
a589cb32-b6e2-4d47-b539-5a4fa3ccd32f
Nsor Abala, Randolph
99785457-faa7-4e22-b4f5-674ade6ff22b

Boakye, Jeff Danquah, Tingbani, Ishmael, Ahinful, Gabriel Sam and Nsor Abala, Randolph (2021) The relationship between environmental management performance and financial performance of firms listed in the Alternative Investment Market (AIM) in the UK. Journal of Cleaner Production, 278, [124034]. ().

Record type: Article

Abstract

This paper examines the relationship between environmental management and SMEs performance. The study adopts General Methods of Moments (GMM) on a sample of 201 quoted Small and Medium Enterprises (SMEs) on the United Kingdom (UK) Alternative Investment Market (AIM) from 2011 to 2016. Consistent with our prediction based on contradictory results of existing studies, the study documents that corporate investment channelled through efficient environmental management translates into superior SME performance. In particular, we find a non-monotonic (inverted U-shaped) relationship between environmental management and financial performance, which suggests that SMEs have an optimal environmental management level that maximises their performance. We find the predictability to be stronger among medium and larger firms, where both ROA and Tobin’s q revealed a significant relationship with environmental performance. The implication of the findings and recommendations are discussed.

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Manuscript Final environmental management - Accepted Manuscript
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Accepted/In Press date: 30 August 2020
e-pub ahead of print date: 5 September 2020
Published date: 1 January 2021
Keywords: Alternative investment market, Environmental management, Financial performance, Natural resource-based view, Small and medium-sized enterprises

Identifiers

Local EPrints ID: 444996
URI: http://eprints.soton.ac.uk/id/eprint/444996
DOI:
ISSN: 0959-6526
PURE UUID: 79caa64c-185e-4494-902a-a8cb2c8e94dd
ORCID for Ishmael Tingbani:

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Date deposited: 17 Nov 2020 17:39
Last modified: 18 Nov 2020 17:35

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Author: Jeff Danquah Boakye
Author:
Author: Gabriel Sam Ahinful
Author: Randolph Nsor Abala

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