Doing Well by Doing Good: Drivers of Firms’ Economic Motivation for Environmental Management Control System Implementation

58 Pages Posted: 12 Jan 2021

See all articles by Jan Hennig

Jan Hennig

University of Groningen

Sebastian Firk

University of Groningen - Department of Accounting and Auditing

Michael Wolff

University of Göttingen

Hülgen Coskun

University of Goettingen (Göttingen)

Date Written: November 24, 2020

Abstract

This paper contributes to the field of environmental management control systems (EMCSs). We approach EMCSs from an economic perspective and theorize internal and external contingency factors that drive both the economic performance and the decision to implement an EMCS. We argue that the level of environmental costs induced by a firm’s pollution intensity drives the economic benefits and thus the firm’s economic motivation to implement an EMCS. We further expect that this relationship is contingent on the level of environmental awareness in the institutional environment (i.e., Green parties, Greenpeace, and media attention). We develop a framework to assess the extent of EMCS implementation on a multinational and longitudinal dataset comprising 5,599 firm-year observations from Europe and the USA between 2005 and 2016. The results provide support for our predictions. We discuss implications for policy makers and society.

Keywords: Environmental management control system (EMCS), Environmental costs, Economic motivation, Environmental awareness, Institutional environment

Suggested Citation

Hennig, Jan and Firk, Sebastian and Wolff, Michael and Coskun, Hülgen, Doing Well by Doing Good: Drivers of Firms’ Economic Motivation for Environmental Management Control System Implementation (November 24, 2020). Available at SSRN: https://ssrn.com/abstract=3738251 or http://dx.doi.org/10.2139/ssrn.3738251

Jan Hennig (Contact Author)

University of Groningen ( email )

P.O. Box 800
9747 AE Groningen, Groningen 9747 AE
Netherlands

Sebastian Firk

University of Groningen - Department of Accounting and Auditing ( email )

Postbus 72
9700 AB Groningen
Netherlands

Michael Wolff

University of Göttingen ( email )

Platz der Göttinger Sieben 3
Göttingen, DE 37073
Germany

HOME PAGE: http://www.contolling.uni-goettingen.de

Hülgen Coskun

University of Goettingen (Göttingen) ( email )

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