Abstract:
This study investigates the relationship between environmental management practices (EMPs) on financial performance
(FP) using the dataset from 30 rubber manufacturing organizations by building panel models for the sample during the
period of 2012-2016. The study has considered the three different EMPs of energy reduction (amount of furnace oil use
per day), waste (amount of waste water generate), and recycle (amount of recycle waste water) in capturing the effect of
EMPs on FP. In addition, to elucidate how financial performance is dealing with EMPs, the study used return on assets
(ROA) as a determinant of financial performance. It is more difficult to identify the general relationship between EMPs
and FP of firms due to its heterogeneity during growth of firms’.The estimation results suggested that the furnace oil
consumption and recycling of waste water had significant positive driving forces on FP. However waste water treatment
has no significant impact on FP. Therefore, it is critical to investigate the relationship between FP and EMPs which is yet
to be resolved in order to build up a scope for companies to implement better environmental practices in the organizations.
