The Path Dependency and Value Relevancy of Greenhouse Gas Emissions in the Value Chain

This dissertation explores two related aspects of GHG emissions in the value chain. First, it explores the predictors of GHG emission activity in the value chain; and second, the implication of GHG emission activity on the financial performance of the firm. The first part of the dissertation specifically investigates how well the organization's internal GHG emission performance predicts its GHG emissions management within the value chain. The study finds a significant positive association between internal emission performance and GHG emission management within the value chain of a firm.;The second part investigates the implications of both GHG emission performances within the firm's organizational boundaries as well GHG emission activity within its value chain on the financial performance of the firm. The study finds that both firm emission performance and value chain emission activity is positively associated with a market valuation multiple. In addition, the study finds that, on average, emission activity upstream of the organization is associated with improved cost efficiency, when other factors are the same.;Both findings, in combination, suggest that, on average, (1) GHG emission activity in the value chain does not occur randomly but rather is predicted by improved emission performance within organizational boundaries; and, (2) companies that are proactive in the value chain also derive financial benefits. The findings build on extant theory that propose a path-dependency of internal to external firm integration. Also, the findings suggest that the rationale for increased GHG proactivity in the value chain is more than a defensive measure to minimize risk exposure to various regulatory, mimetic or normative pressures. It indicates that increased emission proactivity has tangible impacts on the organizational bottom line.