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Does carbon performance payoff? An empirical evidence from Asia-Pacific region

Mohan Lal Jangid (Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, India)
Anil Kumar Sharma (Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, India)

Asian Review of Accounting

ISSN: 1321-7348

Article publication date: 30 August 2024

180

Abstract

Purpose

This study primarily examines the link between carbon and financial performance in the Asia-Pacific region. In addition, the study also explores how the economic impact of carbon performance varies in carbon-intensive and non-carbon-intensive industries.

Design/methodology/approach

This study takes a sample of 1,539 non-financial firms from 13 Asia-Pacific countries from 2014 to 2021. It employs a firm-fixed effect panel regression model to examine the objective.

Findings

The findings indicate that carbon performance improvement enhances accounting-based and market-based financial performance. The positive impact of carbon abatement stems from increased operational efficiency, energy efficiency and lower production costs. Further, the stock market participants also reward the firm for carbon efficiency. However, the carbon intensity of industrial sectors presents a conflicting picture for this association.

Originality/value

This study adds insights to the literature by providing a contemporary reflection on the nexus between carbon emissions and economic outcomes in the understudied Asia-Pacific region. It also unveils the nuanced difference in the carbon-financial performance relationship attributed to industries' carbon sensitivity.

Keywords

Citation

Jangid, M.L. and Sharma, A.K. (2024), "Does carbon performance payoff? An empirical evidence from Asia-Pacific region", Asian Review of Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/ARA-08-2023-0204

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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