How Does Environmental Performance Affect Financial Performance? Evidence From Japanese Manufacturing Firms

This paper examines the effects of environmental performance on financial performance using the data of Japanese manufacturing firms from 2004 to 2008. As the environmental performance, the paper considers the two different environmental issues of waste and greenhouse gas emissions in capturing the effects of corporate environmental management on financial performance. In addition, to clarify how each financial performance responds to a firm's effort in dealing with different environmental issues, the authors utilize many financial performance indices reflecting various market evaluations.