An analysis of the eco-efficiency and economic performance of Japanese companies

In this article, we analyse whether an effective relationship between environmental performance and economic performance can be demonstrated by analysing a sample of Japanese manufacturing firms. Environmental performance was measured according to an eco-efficiency variable based on CO(2) emissions, a technique pioneered in this study, although it is a significant factor in issues regarding sustainable development. Our analysis found that the relationship between environmental and economic performance constitutes an inverted-U type, implying that efforts to improve environmental performance are accompanied by increasing economic benefits at the onset, but beyond a certain point, the relationship turns into one of trade-off. The results of analysis also indicate differences between the chemical and electrical equipment industries. Further analysis, however, is required to clarify relationships within the materials and assembly industries and assess reasons for any such relationships. Asian Business & Management (2010) 9, 209-222. doi:10.1057/abm.2010.3