Based on the good management theory which states that when the company has a good reputation and sharing in social and environmental activities, this in turn will end up into a strong financial position. This means that corporate social performance come first then corporate financial performance. Therefore, in this dissertation, environmental performance as a part of corporate social performance is considered to be the independent variable which is measured by the ISO 14001 as dummy variable and a questionnaire to evaluate the companies’ actions and perspective towards the environment while corporate financial performance is the dependent variable measured by cumulative stock returns, Return on Assets and Return on Equity. Also will control
…show more content…
Since the efficient markets hypothesis suggests that all information regarding a firm is impounded into price, the environmental variables should be significantly associated with stock prices if they are viewed by market participants as affecting future cash flows. Thus my hypotheses are:
• H1: The environment performance has a significant influence on cumulative stock returns.
• H2: The environment performance has a significant influence on ROA.
• H3: The environment performance has a significant influence on ROE.
Stage 2, testing whether the environmental performance of companies with ISO 14001 and ranked in the CSR index has a positive effect on FP compared to companies that don’t have the ISO 14001 and not ranked in the CSR index. So my hypothesis is:
H4: Companies with ISO 14001 and listed in the CSR index will have a better positive impact on FP than other companies with no ISO and not listed in the index.
4.4 …show more content…
(2007) and Fauzi (2009) , an independent rating company in Canada that measure several dimensions of the CSP to arrive at a total measure of CSP. These dimensions include community issues, diversity in the workplace, employee relations, environmental performance, international issues, product and business practices, and other variables concerning compensation, confidentiality, and ownership in other companies. So environmental performance is one of the dimensions measured in the
Since the efficient markets hypothesis suggests that all information regarding a firm is impounded into price, the environmental variables should be significantly associated with stock prices if they are viewed by market participants as affecting future cash flows. Thus my hypotheses are:
• H1: The environment performance has a significant influence on cumulative stock returns.
• H2: The environment performance has a significant influence on ROA.
• H3: The environment performance has a significant influence on ROE.
Stage 2, testing whether the environmental performance of companies with ISO 14001 and ranked in the CSR index has a positive effect on FP compared to companies that don’t have the ISO 14001 and not ranked in the CSR index. So my hypothesis is:
H4: Companies with ISO 14001 and listed in the CSR index will have a better positive impact on FP than other companies with no ISO and not listed in the index.
4.4 …show more content…
(2007) and Fauzi (2009) , an independent rating company in Canada that measure several dimensions of the CSP to arrive at a total measure of CSP. These dimensions include community issues, diversity in the workplace, employee relations, environmental performance, international issues, product and business practices, and other variables concerning compensation, confidentiality, and ownership in other companies. So environmental performance is one of the dimensions measured in the