Environmental Performance And Its Effect On Corporate Social Performance

728 Words Jul 11th, 2015 3 Pages
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 for firm size, environmentally sensitive industry membership, financial leverage and capital intensity and this model will be shown in figure 4.1

In this dissertation, the capital market response to environmental performance has been measured apart from any particular event or incidence in the Egyptian stock market. The market valuation of firms’ environmental performance is measured using Cumulative stock market returns and abnormal returns. Therefore, the association between environmental performance and the Cumulative stock return and abnormal returns is measured. The study is conducted in two stages. Stage one, testing the environmental performance influence on the cumulative stock returns, ROA and ROE. Since the efficient markets…

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