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Environmental challenges and increasing resource consumption may be mitigated through organizational circular economy (CE) practices. Implementing CE practices requires organizations to rethink, develop, and implement new initiatives and processes. It has been argued that blockchain technology (BCT) can support corporate and supply chain CE practices. However, empirical evidence on whether BCT adoption can complement corporate CE practices when considering firm financial performance is virtually non-existent. Using the resource-based view and a dataset of 1766 firm-year observations of Chinese listed companies, we investigate the relationship between corporate CE practices and financial performance, as well as the moderating effect of BCT adoption. Initial findings reveal a significantly positive relationship between corporate CE practices and financial performance. However, counterintuitively, BCT adoption not only directly negatively relates to firm financial performance but also weakens the positive relationship between CE practices and financial performance. Further analysis found that these direct and indirect negative effects of BCT adoption are only observed in resource-constrained firms, supporting our argument from a resource scarcity perspective. This study provides new insights into the nuanced relationship among CE practices, BCT adoption, and financial performance from the resource-based view. These insights provide new and valuable guidance for researchers and practitioners.
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Distilling the Interplay Between Corporate Environmental Management, Financial, and Emissions Performance: Evidence From U.S. Firms
This article investigates the relationship between firms’ carbon intensity, carbon management practices, and their financial performance. The extant literature on firms’ financial performance and their environmental performance has mostly considered a single dimension of firms’ environmental performance leading to restricted, and often, mixed outcomes. With panel data collected on financial statements and climate change related activities from 136 corporate firms in the U.S. between 2011 and 2018, this article integrates a process dimension based on an environmental management score with an outcome dimension represented by firms’ carbon emissions intensity. A regression model is employed to investigate the relationships between corporate environmental performance and corporate financial performance. We find evidence of a nonlinear relationship between corporate firms’ environmental performance and financial performance across both high and low-carbon intensive sectors. Specifically, we find that for firms in the high-carbon intensive sector, a U-shaped relationship exists between firms’ corporate environmental performance outcome dimension and their financial performance while for the low-carbon intensive sector, the converse is the case. The results show that the interaction between the outcome dimension of environmental performance and financial performance is moderated by the process dimension of environmental performance for firms in the low- and high-carbon intensive sectors.
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- Award ID(s):
- 1847077
- PAR ID:
- 10212938
- Publisher / Repository:
- IEEE
- Date Published:
- Journal Name:
- IEEE Transactions on Engineering Management
- ISSN:
- 0018-9391
- Page Range / eLocation ID:
- 1 to 29
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1109/TEM.2020.3040158
