Enterprises’ Emissions Intensity and Financial Performance in Serbia: The Case Study of Wastewater
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Abstract
Untreated industrial and municipal wastewater is the key factor that leads to water pollution in Serbia. The aim of the paper is to examine the impact of environmental performance (using eco-intensity indicators) of enterprises on their profitability in the period 2011-2020 in Serbia in the area of wastewater. Apart from using the panel data technique in the paper, the Generalized Method of Moments (GMM) is also used to estimate the parameters in the model. The results demonstrate that if the eco-intensity indicator increases, the profitability of an enterprise increases significantly, whereas the profitability of an enterprise decreases with the increase in the size of an enterprise. According to the results of the evaluated model, the capital intensity variable has no influence on the profitability of an enterprise. Additionally, it has been determined that the coefficient with the eco-intensity indicator is quite large, indicating the poor eco-efficiency of Serbian enterprises in the area of wastewater.
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References
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Aoki-Suzuki, C., Dente, S. M., & Hashimoto, S. (2023). Assessing economy-wide eco-efficiency of materials produced in Japan. Resources, Conservation and Recycling, 194, 106981.
Brahmana, R. K., & Kontesa, M. (2021). Does clean technology weaken the environmental impact on the financial performance? Insight from global oil and gas companies. Business Strategy and the Environment, 30(7), 3411-3423.
Cecchini, L., Romagnoli, F., Chiorri, M., & Torquati, B. (2023). Eco-Efficiency and its Determinants: The Case of the Italian Beef Cattle Sector. Agriculture, 13(5), 1107.
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Chappin, M. M., Meeus, M. T., Hekkert, M. P., & Vermeulen, W. J. (2007). Dynamic perspective on the relation between environmental policy and eco-efficiency: the case of wastewater treatment, waste and energy efficiency in the Dutch paper and board industry. Progress in Industrial Ecology, An International Journal, 4(1-2), 19-40.
Chen, F., Ahmad, S., Arshad, S., Ali, S., Rizwan, M., Saleem, M. H., Rizwan, M., Saleem, M.H., Driha, O. M. & Balsalobre-Lorente, D. (2022a). Towards achieving eco-efficiency in top 10 polluted countries: The role of green technology and natural resource rents. Gondwana Research, 110, 114-127.
Chen, Y., Li, C., Li, X., Zhang, X., & Tan, Q. (2022b). Efficiency of Water Pollution Control Based on a Three-Stage SBM-DEA Model. Water, 14(9), 1453.
Dalmacija, B. (2022). Profesor Dalmacija: U Srbiji 4 od 10 građana ne pije potpuno ispravnu vodu. CENTAR ZA ISTRAŽIVAČKO NOVINARSTVO SRBIJE. (3. jun 2022). https://www.cins.rs/profesor-dalmacija-u-srbiji-cetiri-od-10-gradjana-ne-pije-potpuno-ispravnu-vodu/ (Accessed date 12.6. 2023.).
Daud, R., Meutia, I., & Yuniarti, E. (2023). Eco-Efficiency and Financial Performance: An Evidence from Indonesian Listed Company. Riset Akuntansi dan Keuangan Indonesia, 8(1), 12-22.
Ekologika (2023). https://ekologika.rs/vesti/srbija/eps-najveci-inustrijski-zagadjivac-voda-u-srbiji/. (Accessed date: 30.3.2023.)
Galindo-Manrique, A.F., Pérez-Calderón, E. & Rodríguez-García, M. D. P. (2021). Eco-efficiency and stock market volatility: Emerging markets analysis. Administrative Sciences, 11(2), 36.
Gani, A., & Scrimgeour, F. (2014). Modelling governance and water pollution using the institutional ecological economic framework. Economic modelling, 42, 363-372.
Gómez, T., Gémar, G., Molinos-Senante, M., Sala-Garrido, R., & Caballero, R. (2018). Measuring the eco-efficiency of wastewater treatment plants under data uncertainty. Journal of environmental management, 226, 484-492.
Guenster, N., Bauer, R., Derwall, J. & Koedijk, K. (2011). The economic value of corporate eco‐efficiency. European Financial Management, 17(4), 679-704.
Hernández-Chover, V., Bellver-Domingo, Á.,& Hernández-Sancho, F. (2018). Efficiency of wastewater treatment facilities: The influence of scale economies. Journal of environmental management, 228, 77-84.
Hou, X., Liu, J., Zhang, D., Zhao, M., & Xia, C. (2019). Impact of urbanization on the eco-efficiency of cultivated land utilization: A case study on the Yangtze River Economic Belt, China. Journal of Cleaner Production, 238, 117916.
Huang, C., Yin, K., Liu, Z., & Cao, T. (2021). Spatial and temporal differences in the green efficiency of water resources in the Yangtze River Economic Belt and their influencing factors. International Journal of Environmental Research and Public Health, 18(6), 3101.
Kamande, M.W. & Lokina, R.B. (2013). Clean production and profitability: An eco-efficiency analysis of Kenyan manufacturing firms. The Journal of Environment & Development, 22(2), 169-185.
Li, Z., Wei, Y., Li, Y., Wang, Z., & Zhang, J. (2020). China’s Provincial Eco-Efficiency and Its Driving Factors—Based on Network DEA and PLS-SEM Method. Int. J. Environ. Res. Public Health, 17, 8702.
Liu, K., Xue, Y., Lan, Y., & Fu, Y. (2022). Agricultural Water Utilization Efficiency in China: Evaluation, Spatial Differences, and Related Factors. Water, 14(5), 684.
Maziotis, A., Molinos-Senante, M., Sala-Garrido, R., & Mocholí-Arce, M. (2023). Evaluation of dynamic eco-efficiency of water companies: the influence of non-revenue water and water supply interruptions. npj Clean Water, 6(1), 20.
Mitrović, N. (2021). BBC News na srpskom. Svetski dan vode, Srbija i zagađenje: Zašto po našim rekama plutaju fekalije, flaše i hemikalije. https://www.bbc.com/serbian/lat/srbija-56464521 (Accessed date: 30.3.2023.)
Mocholi-Arce, M., Gómez, T., Molinos-Senante, M., Sala-Garrido, R., & Caballero, R. (2020). Evaluating the eco-efficiency of wastewater treatment plants: Comparison of optimistic and pessimistic approaches. Sustainability, 12(24), 10580.
Molinos-Senante, M., Gémar, G., Gómez, T., Caballero, R., & Sala-Garrido, R. (2016). Eco-efficiency assessment of wastewater treatment plants using a weighted Russell directional distance model. Journal of Cleaner Production, 137, 1066-1075.
Radonjić, O., & Ostojić, I. (2023). Srbija i degradacija životne sredine. Ne vredi nam kuća ukoliko nema zemlje da učvrstimo temelje. Istraživanje: Izveštaj o stanju nacije. Nedeljnik, br. 609, 21-25.
Revollar, S., Meneses, M., Vilanova, R., Vega, P., & Francisco, M. (2021). Eco-efficiency assessment of control actions in wastewater treatment plants. Water, 13(5), 612.
Sala-Garrido, R., Mocholí-Arce, M., Molinos-Senante, M., & Maziotis, A. (2021). Comparing operational, environmental and eco-efficiency of water companies in England and Wales. Energies, 14(12), 3635.
Shi, Z., She, Z., Chiu, Y. H., Qin, S., & Zhang, L. (2021). Assessment and improvement analysis of economic production, water pollution, and sewage treatment efficiency in China. Socio-Economic Planning Sciences, 74, 100956.
Stevanovic, S., Minovic, J., & Hanic, A. (2023). Ecoefficiency and firm profitability nexus: the case of Serbia. Fresenius Environmental Bulletin, 32(3), 1196-1201.
Sudha, S. (2020) Corporate environmental performance–financial performance relationship in India using eco-efficiency metrics. Management of Environmental Quality: An International Journal 31(6), 1497-1514.
Wang, H., & Peng, G. (2021). Green Economic Efficiency Evaluation Based on the GMM Model. Mathematical Problems in Engineering, 2021, 1-8.
Wang, K., Elahi, E., Zhang, Y., Wang, D., & Khalid, Z. (2022). A Development of Green Finance and Regional Eco-Efficiency in China. Sustainability, 14(22), 15206.
Yu, C., Shi, L., Wang, Y., Chang, Y., & Cheng, B. (2016). The eco-efficiency of pulp and paper industry in China: an assessment based on slacks-based measure and Malmquist–Luenberger index. Journal of cleaner Production, 127, 511-521.
Zakon o vodama (2018). "Sl. Glasnik RS", br. 30/2010, 93/2012, 101/2016, 95/2018 i 95/2018 - dr. zakon. https://www.paragraf.rs/propisi/zakon_o_vodama.html (Accessed date: 3.4.2023.)
Zelena zemlja (2023). http://www.zelenazemlja.com/voda.php (Accessed date: 30.3.2023.)
Zhou, Y., Kong, Y., Wang, H., & Luo, F. (2020). The impact of population urbanization lag on eco-efficiency: A panel quantile approach. Journal of Cleaner Production, 244, 118664.
Zhu, J., Zhou, B., & Li, W. (2022). Impact Analysis of Environmental Regulation and Improvement of Agricultural Economic Efficiency on Living Environment Based on Systematic GMM Model. Journal of Environmental and Public Health, 2022.