Can green producers achieve strong profitability without engaging in high-risk activities?

Abstract

PurposeAs environmental awareness becomes more widespread, the issue of making manufacturing more sustainable has gained increasing attention. The natural-resource-based view (NRBV) sets out to explain how firms can reduce their environmental footprint while simultaneously improving their financial performance. Drawing on the NRBV and entrepreneurial orientation (EO) literature, this study examines the relationship between pollution prevention, risk-taking and financial performance.Design/methodology/approachData from 303 Swedish manufacturing firms were collected through a survey.FindingsThe findings reveals a positive relationship between pollution prevention and financial performance, and this relationship is found to be negatively moderated by risk-taking; that is, pollution prevention reduces the requisite for risk-taking in the achievement of financial performance.Originality/valueThis is the first study to explore how risk-taking moderates the relationship between a pollution prevention strategy and financial performance.