SMBs

Environmental Sustainability and Financial Performance of SMEs

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Executive Summary

This paper focuses on the relationship between environmental sustainability and the financial performance of SMEs in terms of profit development and revenue development. The analysis uses a unique dataset of 337 Dutch and Chinese firms. The results suggest a significant positive association between environmental sustainability and firm performance. It appears, however, that different indicators of environmental sustainability display a distinct relationship with the two performance measures. When firms have a policy on the re-usage of materials they perform significantly better in terms of profit development and when firms have a policy on the reduction of pollution they perform significantly better in terms of revenue development.

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