Price competition, short-termism and environmental performance

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper studies the relationships between the intensity of price competition, time horizon and environmental performance. We hypothesize that more intense price competition discourages environmental performance by inducing short-termism in companies.We test the hypotheses on a sample of 3152 companies from twelve European countries. Using structural equation modeling, test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that (long) time horizon significantly increases their environmental performance. However, the net negative effect of the intensity of price competition on environmental performance is small in absolute terms. The policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand.
Original languageEnglish
Pages (from-to)125-134
JournalJournal of Cleaner Production
Volume116
DOIs
Publication statusPublished - 2016

Fingerprint

Industry
Environmental performance
Short-termism
Price competition
price
environmental performance
modeling
Time horizon
test
Structural equation modeling
Strategic decisions
Policy implications
Consumer surplus
European countries
effect
decision
policy
surplus

Keywords

  • corporate social performance
  • environmental performance
  • short-termism
  • price competition
  • SMEs
  • time horizon

Cite this

@article{eaa7f53308d84a9f81ca48066db06756,
title = "Price competition, short-termism and environmental performance",
abstract = "This paper studies the relationships between the intensity of price competition, time horizon and environmental performance. We hypothesize that more intense price competition discourages environmental performance by inducing short-termism in companies.We test the hypotheses on a sample of 3152 companies from twelve European countries. Using structural equation modeling, test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that (long) time horizon significantly increases their environmental performance. However, the net negative effect of the intensity of price competition on environmental performance is small in absolute terms. The policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand.",
keywords = "corporate social performance, environmental performance, short-termism, price competition, SMEs, time horizon",
author = "Johan Graafland",
year = "2016",
doi = "10.1016/j.jclepro.2015.12.045",
language = "English",
volume = "116",
pages = "125--134",
journal = "Journal of Cleaner Production",
issn = "0959-6526",
publisher = "ELSEVIER SCI LTD",

}

Price competition, short-termism and environmental performance. / Graafland, Johan.

In: Journal of Cleaner Production, Vol. 116, 2016, p. 125-134.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Price competition, short-termism and environmental performance

AU - Graafland, Johan

PY - 2016

Y1 - 2016

N2 - This paper studies the relationships between the intensity of price competition, time horizon and environmental performance. We hypothesize that more intense price competition discourages environmental performance by inducing short-termism in companies.We test the hypotheses on a sample of 3152 companies from twelve European countries. Using structural equation modeling, test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that (long) time horizon significantly increases their environmental performance. However, the net negative effect of the intensity of price competition on environmental performance is small in absolute terms. The policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand.

AB - This paper studies the relationships between the intensity of price competition, time horizon and environmental performance. We hypothesize that more intense price competition discourages environmental performance by inducing short-termism in companies.We test the hypotheses on a sample of 3152 companies from twelve European countries. Using structural equation modeling, test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that (long) time horizon significantly increases their environmental performance. However, the net negative effect of the intensity of price competition on environmental performance is small in absolute terms. The policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand.

KW - corporate social performance

KW - environmental performance

KW - short-termism

KW - price competition

KW - SMEs

KW - time horizon

U2 - 10.1016/j.jclepro.2015.12.045

DO - 10.1016/j.jclepro.2015.12.045

M3 - Article

VL - 116

SP - 125

EP - 134

JO - Journal of Cleaner Production

JF - Journal of Cleaner Production

SN - 0959-6526

ER -