This dissertation examines two main research questions: Why do firms deviate from their
predicted level of toxic emissions, and how do these differences relate to financial performance?
The objective is threefold: (1) to understand deviation in corporate environmental performance
by looking at both industry and firm level variables, (2) to see how this deviation relates to both
profitability and fluctuations in financial performance, and (3) to see if, and how, corporate
environmental legitimacy affects the relationship between corporate environmental deviation and
corporate financial performance.
To achieve this objective the construct “corporate environmental performance deviation”
is developed. It is defined as the extent to which a firm’s environmental performance deviates
from its predicted performance, and is used to capture within-firm strategic choices in
environmental management. Predicted environmental performance is calculated based on certain
firm characteristics such as size and industry. Actual environmental performance is calculated
using a weighted score of air emissions obtained from the Toxic Release Inventory (TRI)
database. The difference between these two values represents a corporation’s environmental
performance deviation.
Corporate environmental performance deviation focuses on strategic choices related to
environmental management, while recognizing that environmental management is the result of
both institutional pressures and within-firm strategic decisions. Aligned with this focus, variables
2
related to this strategic choice are used to explain deviation in environmental management,
including an environmental integration capability, firm strategy, and industry munificence and
dynamism. Associated with the internal and external organizational analysis, institutional theory
and the resource-based view (RBV) are used to explore the tension between deviation to increase
competitiveness versus isomorphism to attain legitimacy.
The sample is composed of 311 U.S. firms who have reported their toxic air releases to
the TRI from 1998-2007. The sample is broken down into two subsets, those that exceed
(positive deviation) or fail to meet (negative deviation) predicted environmental performance.
Results of a longitudinal analysis show that positive environmental deviation is related to
a greater capacity to strategically integrate environmental issues into a firm’s existing business
approach, less munificence and dynamism in the task environment, and reduced financial
fluctuations. Negative environmental deviation is decreased through a demonstrated capacity to
strategically integrate environmental issues into a firm’s existing strategic approach, and related
to greater munificence and dynamism in the task environment, reduced profitability and
increased financial fluctuations.
Lastly, although there are no significant main effects for corporate environmental
legitimacy, the paradoxical combination of negative deviation and environmental legitimacy can
reduce the severity of the negative financial results to negative deviation, both in terms of
profitability and financial fluctuations.
| Identifer | oai:union.ndltd.org:MANITOBA/oai:mspace.lib.umanitoba.ca:1993/4352 |
| Date | 17 January 2011 |
| Creators | Walker, Kent |
| Contributors | Gao, Jijun (Business Administration) Turner, Nick (Business Administration), Dyck, Bruno (Business Administration) Thompson, Shirley (Natural Resources Institute) Deephouse, David (University of Alberta) |
| Source Sets | University of Manitoba Canada |
| Language | en_US |
| Detected Language | English |
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