The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye
Carbon emissions, one of the main causes of climate change and environmental degradation, have recently become extremely important. In parallel, firms' disclosure of their environmental performance and activities to reduce carbon emissions are viewed positively by stakeholders and society. The...
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Mehmet Akif Ersoy University
2024-06-01
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| Series: | Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi |
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| Online Access: | https://dergipark.org.tr/en/download/article-file/3637511 |
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| author | Musa Özçelik Seren Aydıngülü Sakalsız |
| author_facet | Musa Özçelik Seren Aydıngülü Sakalsız |
| author_sort | Musa Özçelik |
| collection | DOAJ |
| description | Carbon emissions, one of the main causes of climate change and environmental degradation, have recently become extremely important. In parallel, firms' disclosure of their environmental performance and activities to reduce carbon emissions are viewed positively by stakeholders and society. The question arises whether firms' activities to reduce carbon emissions create additional costs for firms or reduce their costs. In this study, we investigate the relationship between carbon emissions and firms' financial performance. We also examine the moderating effect of innovation on the relationship between carbon emissions and financial performance. The lack of a study on developing countries reveals the importance of this study. Within the scope of the analysis, 14 firms in the BIST Sustainability Index with carbon emissions and innovation data between 2017-2021 were included. Using the random effects model, we find that carbon emissions have a negative effect on firms' return on assets and return on equity, and this negative effect turns positive with innovation. On the other hand, no statistically significant effect was found between Tobin's q value and carbon emissions and innovation. The study shows that firms should adopt proactive environmental strategies and organize their resources and investments to manage their financial performance well. |
| format | Article |
| id | doaj-art-9b6352ab08a644ee9d67012077d1fdc3 |
| institution | Kabale University |
| issn | 2149-1658 |
| language | English |
| publishDate | 2024-06-01 |
| publisher | Mehmet Akif Ersoy University |
| record_format | Article |
| series | Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi |
| spelling | doaj-art-9b6352ab08a644ee9d67012077d1fdc32025-01-27T13:10:30ZengMehmet Akif Ersoy UniversityMehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi2149-16582024-06-0111272174010.30798/makuiibf.1414190273The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from TürkiyeMusa Özçelik0https://orcid.org/0000-0002-2175-3605Seren Aydıngülü Sakalsız1https://orcid.org/0000-0001-7452-311XTARSUS UNIVERSITYKahramanmaras Sütcü Imam UniversityCarbon emissions, one of the main causes of climate change and environmental degradation, have recently become extremely important. In parallel, firms' disclosure of their environmental performance and activities to reduce carbon emissions are viewed positively by stakeholders and society. The question arises whether firms' activities to reduce carbon emissions create additional costs for firms or reduce their costs. In this study, we investigate the relationship between carbon emissions and firms' financial performance. We also examine the moderating effect of innovation on the relationship between carbon emissions and financial performance. The lack of a study on developing countries reveals the importance of this study. Within the scope of the analysis, 14 firms in the BIST Sustainability Index with carbon emissions and innovation data between 2017-2021 were included. Using the random effects model, we find that carbon emissions have a negative effect on firms' return on assets and return on equity, and this negative effect turns positive with innovation. On the other hand, no statistically significant effect was found between Tobin's q value and carbon emissions and innovation. The study shows that firms should adopt proactive environmental strategies and organize their resources and investments to manage their financial performance well.https://dergipark.org.tr/en/download/article-file/3637511carbon emissionsinnovationenvironmental performancefinancial performancerandom effects modelmoderating effect |
| spellingShingle | Musa Özçelik Seren Aydıngülü Sakalsız The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi carbon emissions innovation environmental performance financial performance random effects model moderating effect |
| title | The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye |
| title_full | The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye |
| title_fullStr | The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye |
| title_full_unstemmed | The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye |
| title_short | The Impact of Firms' Carbon Emissions on Financial Performance and the Role of Innovation: Evidence from Türkiye |
| title_sort | impact of firms carbon emissions on financial performance and the role of innovation evidence from turkiye |
| topic | carbon emissions innovation environmental performance financial performance random effects model moderating effect |
| url | https://dergipark.org.tr/en/download/article-file/3637511 |
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