How do institutional shareholders manipulate corporate environmental strategy to protect their equity value? A study of the adoption of ISO 14001 by Egyptian firms

Business Strategy and the Environment

Volumn 19, Issue 8, 2010, Pages 495-511

  Wahba, Hayam ^a  

^a Main Campus   (Egypt)

Author keywords

Environmental policy; Environmental strategy; Financial performance; Institutional ownership; Investment opportunities; ISO 14001; Managerial entrenchment

Indexed keywords

CORPORATE STRATEGY; ENVIRONMENTAL MANAGEMENT; ENVIRONMENTAL POLICY; FINANCE; FIRM OWNERSHIP; INDUSTRIAL INVESTMENT; INDUSTRIAL PERFORMANCE; INSTITUTIONAL FRAMEWORK; STAKEHOLDER; STANDARDIZATION;

EGYPT;

EID: 78649519489     PISSN: 09644733     EISSN: 10990836     Source Type: Journal    
DOI: 10.1002/bse.654     Document Type: Article

References (104)

1. Abdel Shahid S. 2003. Does Ownership Structure Affect Firm Value? Evidence from the Egyptian Stock Market. Cairo and Alexandria Stock Exchanges, Research and Markets Development Department. [25 June 2008].
2. Aguilera R. 2005. Corporate governance and director accountability: an institutional comparative perspective. British Journal of Management 16: S39-S54.
3. Aguilera R, Williams C, Conley J, Rupp D. 2006. Corporate governance and social responsibility: a comparative analysis of the UK and the US. Corporate Governance: an International Review 14: 147-158.
4. Babakri K, Bennett R, Franchetti M. 2003. Critical factors for implementing ISO 14001 standard in United States industrial companies. Journal of Cleaner Production 11: 749-752.
5. Bainbridge S. 2008. Investor Activism: Reshaping the Playing Field, UCLA School of Law, Law-Econ Research Paper No. 08-12. [10 July 2008].
6. Bansal P, Bonger W. 2002. Deciding on ISO 14001: economic, institutions and context. Long Range Planning 35: 269-290.
7. Bansal P, Hunter T. 2003. Strategic explanations for early adoption of ISO 14001. Journal of Business Ethics 46(3): 289-299.
8. Berle A, Means G. 1932. The Modern Corporation and Private Property. MacMillan: New York.
9. Bushee B. 1998. The influence of institutional investors on myopic R&D investment behavior. The Accounting Review 73: 305-333.
10. Bushee B. 2001. Do institutional investors prefer near-term earnings over long-run value? Contemporary Accounting Research 18(2): 207-246.
11. Cairo and Alexandria Stock Exchange (CASE). 2007. Market Data: Main Market Indicators. [20 March 2008].
12. Chapple W, Cook A, Galt V, Paton D. 2001a. The determinants of voluntary investment decision. Managerial and Decision Economics 22(8): 453-463.
13. Chapple W, Cook A, Galt V, Paton D. 2001b. The characteristics and attributes of UK firms obtaining accreditation to ISO 14001. Business Strategy and the Environment 10(4): 238-244.
14. Chung K, Pruitt S. 1994. A simple approximation of Tobin's q. Financial Management 23: 70-74.
15. Coffey B, Fryxell G. 1991. Institutional ownership of stock and dimensions of corporate social performance: an empirical examination. Journal of Business Ethics 10: 437-444.
16. Cox P, Brammer S, Millington A. 2004. An empirical examination of institutional investor preferences for corporate social performance. Journal of Business Ethics 52: 27-43.
17. Cramer J. 1998. Environmental management: from 'fit' to 'stretch'. Business Strategy and the Environment 7(3): 162-172.
18. CSR Navigator. 2007. Public Policies in Africa, the Americas, Asia and Europe. Bertelsmann Stiftung and GTZ. [3 June 2008].
19. Doukas J, McKnight P, Pantzalis C. 2005. Security analysis, agency costs, and UK firm characteristics. International Review of Financial Analysis 14: 493-507.
20. Dowell G, Hart S, Yeung B. 2000. Do corporate global environmental standards create or destroy market value. Management Science 46: 1059-1074.
21. Durnev A, Kim H. 2005. To steal or not to steal: firm attributes, legal environment and valuation. Journal of Finance 60(3): 1461-1493.
22. Elsayed K, Paton D. 2005. The impact of environmental performance on firm performance: static and dynamic panel data evidence. Structural Change and Economic Dynamics 16(3): 395-412.
23. Elsayed K, Paton D. 2009. The impact of financial performance on environmental policy: does firm life cycle matter? Business Strategy and the Environment. DOI: 10.1002/bse.608.
24. El-Zayat H, Ibraheem G, Kandil S. 2006. The response of industry to environmental regulations in Alexandria, Egypt. Journal of Environmental Management 79: 207-214.
25. Fama E, Jensen C. 1983. Separation of ownership and control. Journal of Law Economics 26: 301-325.
26. Fawzy S. 2003. Assessment of Corporate Governance in Egypt, Egyptian Center for Economic Studies Working Paper 82.
27. Finkelstein S, D'Aveni R. 1994. CEO duality as a double-edged sword: how boards of directors balance entrenchment avoidance and unity of command. Academy of Management Journal 37: 1079-1108.
28. Friedman M. 1970. The social responsibility of business is to increase its profits. New York Times 13 September: 122-126.
29. Frye M. 2004. Equity-based compensation for employees: firm performance and determinants. Journal of Financial Research 27(1): 31-54.
30. Ghobadian A, Viney H, Liu J, James P. 1998. Extending linear approaches to mapping corporate environmental behaviour. Business Strategy and the Environment 7(1): 13-23.
31. Gomaa S. 1997. Environmental Policy Making In Egypt. American University in Cairo Press: Cairo.
32. Graves S, Waddock S. 1994. Institutional owners and corporate social performance. Academy of Management Journal 37(4): 1034-1046.
33. Greene W. 2003. Econometric Analysis, 4th edn. Prentice-Hall: Englewood Cliffs, NJ.
34. Gujarati D. 2003. Basic Econometrics, 4th edn. McGraw-Hill, New York.
35. Haigh M, Hazelton J. 2004. Financial markets: a tool for social responsibility? Journal of Business Ethics 52(1): 59-71.
36. Haigh M, Jones M. 2007. A critical review of relations between corporate responsibility research and practice. Electronic Journal of Business Ethics and Organization Studies 12(1): 16-28.
37. Hansen S, Hill L. 1991. Are institutional investors myopic? A time series study of four technology driven industries. Strategic Management Journal 12: 1-16.
38. Hart S, Ahuja G. 1996. Does it pay to be green? An empirical examination of the relationship between emission reduction and financial performance. Business Strategy and the Environment 5(1): 30-37.
39. Hass J. 1996. Environmental (greening) management typologies: an evaluation, operationalization and empirical development. Business Strategy and the Environment 5(2): 59-68.
40. Heiner A. 1983. The origin of predictable behavior. American Economic Review 73: 560-594.
41. Holland L, Foo Y. 2003. Differences in environmental reporting practices in the UK and the US: the legal and regulatory context. British Accounting Review 35: 1-18.
42. Hosmer W, Lemeshow S. 2000. Applied Logistic Regression, 2nd edn. Wiley: New York.
43. Huse M. 2004. Corporate governance in advanced market economies: understanding important contingencies. Economic Commission for Europe: Expert Meeting on Good Governance for SMEs, 2004, Paper 17. [5 March 2007].
44. Huse M. 2005. Accountability and creating accountability: a framework for exploring behavioural perspectives of corporate governance. British Journal of Management 16: S65-S79.
45. Jaggi B, Freedman M. 1992. An examination of the impact of pollution performance on economic and market performance: pulp and paper firms. Journal of Business Finance and Accounting 19: 697-713.
46. Jamali D. 2007. The case for strategic corporate social responsibility in developing countries. Business and Society Review 112: 11-27.
47. Jawahar I, McLaughlin G. 2001. Toward a descriptive stakeholder theory: an organizational life cycle approach. Academy of Management Review 26: 397-414.
48. Jensen M, Meckling W. 1976. Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3: 305-360.
49. Jiang R, Bansal P. 2003. Seeing the need for ISO 14001. Journal of Management Studies 40: 1047-1067.
50. Jin Z. 2000. On the differential market reaction to dividend initiation. The Quarterly Review of Economics and Finance 40: 263-277.
51. Johnson R, Greening D. 1999. The effects of corporate governance and institutional ownership on corporate social performance. Academy of Management Journal 42(5): 564-576.
52. Jones J. 2001. The implications of firms' investment opportunities for the valuation of cash flows from investing activities. Advances in Accounting 18: 169-193.
53. Jones M. 1996. Social responsibility and the 'green' business firm. Industrial and Environmental Crisis Quarterly 9(3): 327-345.
54. Juravle C, Lewis A. 2008. Identifying impediments to SRI in Europe: a review of the practitioner and academic literature. Business Ethics: a European Review 17(3): 285-310.
55. Kim K, Henderson G, Garrison S, 1993. Examination of Tobin's q for takeover firms. Quarterly Journal of Business and Economics 32(1): 3-26.
56. King A, Lenox M. 2002. Exploring the locus of profitable pollution reduction. Management Science 48(2): 289-299.
57. Koh P. 2003. On the association between institutional ownership and aggressive corporate earnings management in Australia. The British Accounting Review 35: 105-128.
58. Lam S, Chng B. 2006. Do executive stock option grants have value implications for firm performance? Review of Quantitative Finance and Accounting 26(3): 249-274.
59. Lindenberg E, Ross S. 1981. Tobin's Q ratio and industrial organization. Journal of Business 54: 1-32.
60. Longstreth B, Rosenbloom D. 1973. Corporate Social Responsibility and Institutional Investor: a report to the Ford Foundation. New York: Praeger.
61. Mackenzie C, Lewis A. 1999. Morals and markets: the case of ethical investing. Business Ethics Quarterly 9(3): 439-452.
62. Mahapatra S. 1984. Investor reaction to a corporate social accounting. Journal of Business Finance and Accounting 11(1): 29-40.
63. Mahoney L, Roberts W. 2007. Corporate social performance, financial performance and institutional ownership in Canadian firms. Accounting Forum 31: 233-253.
64. Mallin C. 2002. Institutional investors and the growth of global influence. Corporate Governance: an International Review 10(2): 67-68.
65. Matterson H. 2000. Ethics admirable but money comes first. The Australian 35, 21 August.
66. McLachlan J, Gardner J. 2004. A comparison of socially responsible and conventional investors. Journal of Business Ethics 52: 11-25.
67. McWilliams A, Siegel D. 2000. Corporate social responsibility and financial performance: correlation or misspecification? Strategic Management Journal 21(5): 603-609.
68. Middle East and North Africa Corporate Governance Workshop (MENA). 2003. Corporate Governance in Morocco, Egypt, Lebanon and Jordan. Organization of Economic Co-Operation and Development (OECD): Paris.
69. Miller D, Friesen P. 1984. A longitudinal study of the corporate life cycle. Management Science 30: 1161-1183.
70. Min H, Prather L. 2001. Tobin's Q, agency conflicts, and differential wealth effects of international joint ventures. Global Finance Journal 12(2): 267-283.
71. Morellec E. 2004. Can managerial discretion explain observed leverage ratio? Review of Financial Studies 17: 257-294.
72. Morrow D, Rondinelli D. 2002. Adopting corporate environmental management systems: motivations and results of iso 14001 and EMAS certification. European Management Journal 20: 159-171.
73. Neubaum D, Zahra S. 2006. Institutional ownership and corporate social performance: the moderating effects of investment horizon, activism and coordination. Journal of Management 32(1): 108-131.
74. Peattie K, Charter M. 1997. Green marketing. In Green Management: a Reader, McDonagh P, Prothero A (eds). Dryden: London; 388-412.
75. Pregibon D. 1980. Goodness of link tests for generalized link models. Applied Statistics 29: 15-24.
76. Pregibon D. 1981. Logistic regression diagnostics. Annals of Statistics 9: 705-724.
77. Preston L, O'Bannon D. 1997. The corporate social-financial performance relationship: a typology and analysis. Business and Society 36(4): 419-429.
78. Ramsey, B. 1969. Tests for specification errors in classical linear least square regression analysis. Journal of the Royal Statistical Society 31: 350-371.
79. Rizk R, Dixon R, Woodhead A. 2008. Corporate social and environmental reporting: a survey of disclosure practices in Egypt. Social Responsibility Journal 4(3): 306-323.
80. ROSC. 2004. Corporate Governance Country Assessment. World Bank-IMF. [20 March 2007].
81. Russo M. 2009. Explaining the impact of ISO 14001 on emission performance: a dynamic capabilities perspective on process and learning. Business Strategy and the Environment in press. DOI: 10.1002/bse.587
82. Seifert B, Gonenc H, Wright J. 2005. The international evidence on performance and equity ownership by insiders, blockholders, and institutions. Journal of Multinational Financial Management 15: 171-191.
83. Shamseldin A. 2006. Strengthening corporate social responsibility in the MENA region: case study of Egypt. The Fifth MENA Development Forum, 2006, Beirut. World Bank Group. [6 April 2008].
84. Short H, Keasey K. 1999. Managerial ownership and the performance of firms: evidence from the UK. Journal of Corporate Finance 5: 79-101.
85. Siegel D. 1997. The impact of investments in computers on manufacturing productivity growth: a multiple-indicators, multiple-causes approach. Review of Economics and Statistics 79(1): 68-78.
86. Solomon E. 2006. A global trend companies can't ignore. Daily News Egypt 12 August. [5 June 2008].
87. Sparkes R. 1998. The challenge of ethical investment: activism assets and analysis. In The Role of Business Ethics in Economic Performance, Jones I, Pollitt M (ed.). McMillan: London; 141-171.
88. Sparkes R, Cowton C. 2004. The maturing of socially responsible investment: a review of the developing link with corporate social responsibility. Journal of Business Ethics 52(1): 45-57.
89. Spicer B. 1978. Investors, corporate social performance and information disclosure: an empirical study. The Accounting Review 33(1): 94-111.
90. Suchman M. 1995. Managing legitimacy: strategies and institutional approaches. Academy of Management Review 20(3): 571-610.
91. Sundaramurthy C, Rhoades D, Rechner P. 2005. A meta-analysis of the effects of executive and institutional ownership on firm performance. Journal of Managerial Issues 15: 494-510.
92. Teoh H, Shiu G. 1990. Attitudes towards corporate social responsibility and perceived importance social responsibility information characteristics in a decision context. Journal of Business Ethics 9: 71-77.
93. Tobin J. 1978. Monetary policies and the economy. Southern Economic Journal 44(3): 421-431.
94. Toffel M. 2006. Resolving Information Asymmetries in Markets: the Role of Certified Management Programs, Harvard Business School Working Paper 07-023. [22 August 2008].
95. Toms S. 2002. Firm resources, quality signals and the determinants of corporate environmental reputation: some UK evidence. British Accounting Review 34(3): 257-282.
96. Waddock S, Graves S. 1997. The corporate social performance-financial performance link. Strategic Management Journal 18(4): 303-319.
97. Wahba H. 2008a. Does the market value corporate environmental responsibility? An empirical examination. Corporate Social Responsibility and Environmental Management 15: 89-99.
98. Wahba H. 2008b. Exploring the moderating effect of financial performance on the relationship between corporate environmental responsibility and institutional investors: some Egyptian evidence. Corporate Social Responsibility and Environmental Management 15: 361-371.
99. Weisbach S. 1988. Outside directors and CEO turnover. Journal of Financial Economics 20: 431-460.
100. Welch E, Mori Y, Aoyagi-Usui M. 2002. Voluntary adoption of ISO 14001 in Japan: mechanisms, stages and effects. Business Strategy and the Environment 11: 1-13.
101. Welford R, Chan C, Man M. 2008. Priorities for corporate social responsibility: a survey of businesses and their stakeholders. Corporate Social Responsibility and Environmental Management 15: 52-62.
102. Wels T. 2007. Corporate Governance: Roundtable. [20 May 2008].
103. Zahra S, Neubaum D, Huse M. 2000. Entrepreneurship in medium-sized companies: exploring the effects of ownership and governance systems. Journal of Management 26: 947-976.
104. Zahra S, Oviatt B, Minyard K. 1993. Effects of corporate ownership and board structure on corporate social responsibility and financial performance. Academy of Management Best Paper Proceedings, Atlanta, GA; 336-340.