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Abstract A vast body of literature shows that environmental management system certification, especially ISO 14001 certification, has the potential to relieve environmental stress and reduce ecological impact. However, opinions vary… Click to show full abstract
Abstract A vast body of literature shows that environmental management system certification, especially ISO 14001 certification, has the potential to relieve environmental stress and reduce ecological impact. However, opinions vary on the financial effects of ISO 14001. This study aims to increase the understanding of the financial effects of environmental management system certification on firms’ performance. We posit that Chinese listed firms in the metallurgical industry with ISO 14001 certification have lower debt financing costs. Using a difference-in-difference approach and propensity score matching, we find evidence to support our hypothesis. In addition, we find that ISO 14001 has different debt financing impacts on firms with different corporate ownership and financing constraints. This study provides one of the first perspectives in the literature of the link between ISO 14001 certification and debt financing, and its results have practical significance, as they encourage high energy-consumption enterprises to gain ISO 14001 certification.
Journal Title: Journal of Cleaner Production
Year Published: 2020
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