Beyond "Does it Pay to be Green?" A Meta-Analysis of Moderators of the CEP-CFP Relationship

Heather R. Dixon-Fowler, Daniel J. Slater, Jonathan L. Johnson, Alan E. Ellstrand, Andrea M. Romi

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442 Scopus citations


Review of extant research on the corporate environmental performance (CEP) and corporate financial performance (CFP) link generally demonstrates a positive relationship. However, some arguments and empirical results have demonstrated otherwise. As a result, researchers have called for a contingency approach to this research stream, which moves beyond the basic question "does it pay to be green?" and instead asks "when does it pay to be green?" In answering this call, we provide a meta-analytic review of CEP-CFP literature in which we identify potential moderators to the CEP-CFP relationship including environmental performance type (e. g., reactive vs. proactive performance), firm characteristics (e. g., large vs. small firms), and methodological issues (e. g., self-report measures). By analyzing these contingencies, this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the CEP-CFP research. Some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms, US firms seem to benefit more than international counterparts, and environmental performance seems to have the strongest influence on market-measures of financial performance.

Original languageEnglish
Pages (from-to)353-366
Number of pages14
JournalJournal of Business Ethics
Issue number2
StatePublished - Jan 2013


  • Corporate environmental performance
  • Corporate financial performance
  • Environmental sustainability
  • Meta-analysis


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