Research On The Relationship Between Economic Performance And Environmental Performance On The Firm Level

As the main participant in the development of social economy, profit was the exclusive goal for a firm, neglecting the negative effects to entironment and public in the process of persuing economic perormance for a long time. After 1990's, with the shortage of resource, deterioration of environment and great gaps between the rich and the poverty, a firm, as the mainstay of social economy, their behavior is reviewed, as well as the obligation they should take, based on the thought of sustainable development. It is pointed out that only when the harmony between environment performance and ecomonic performance was reached, good exterior and interior conditions can ceate for the firms'long-term existence and sustainable development.Under this background, the study contains a theoretical and empirical examination of the relationship between the environmental and economic performance of firms. It reframes the crucial question to read, how the relationship develops across time and cases, and how to improve the envrionrenment to strengthen the competitive ability.The existing literature is first reviewed. Then, probing into the gaps in the previous knowledge, the core study work and content are put forward:(1) The concept of environmental profit is introduced to link the environment performance with economic performance. Then, the function shape, location of optimal level of environment and area of"win-win"are confirmed.(2) The relationship is regarded as a complicated system developing across time and cases, and Tianjin Rockcheck Steel Group Co. LTD. is taken for an example with the method of system dynamics to find the main determinants of the relationship.(3) Some suggestions are put forward to improve the relationship. The idea of building up the legislation system from view of governments'controlling and inducting function and the manner of interior environment management based on the series quality standard of ISO14000 from the view of firms are brought forward.It can be concluded from the theoretical analysis and case study that the firm-level relationship between environmental and economic performance takes the form of an inverted U-shaped function of environmental performance, and the"win-win"result can be achieved by firms and society. It is affected by six determinants: technology, regime, preference of customers, visibility, standard of environment quality, preference to the environment risk of legislator and managers of firms. And the environmental performance can be improved without hurting economic performance on the firm level through the endevour of improving the main determinants.