James J. Cordeiro

Environmental proactivism and firm performance: evidence from security analyst earnings forecasts

There is an ongoing debate over the impact of corporate pro-environment actions and strategies (reflected, for example, in pollution prevention and emission reductions, product re-design, materials stewardship) on corporate financial performance in US corporations today. A review of the existing literature in this area yields no consistent pattern of relationships between corporate environmental proactivism and financial performance when historical corporate accounting performance and stock market measures of performance are used. We revisit this relationship using a novel measure of firm performance: security analyst earnings forecasts. Specifically, we demonstrate a significant, negative relationship between environmental proactivism (using Toxic Release Inventory data) and industry analyst 1- and 5-year earnings-per-share performance forecasts for a sample of 523 US firms in 1992. We discuss the implications of these findings and provide suggestions for future research.

An empirical evaluation of environmental efficiencies and firm performance: Pollution prevention versus end-of-pipe practice

Abstract Environmental advocates maintain that waste minimization, recycling, remanufacturing and other environmental practices will greatly enhance the “bottom-line” for organizations. We investigate the differential relationships between (separately) pollution prevention and end-of-pipe efficiencies with short-run financial performance (measured using return on sales (ROS)). After controlling for both firm size and financial leverage, we find that for 482 US firms in 1992, pollution prevention and end-of-pipe efficiencies are both negatively related to ROS, and that this negative relationship is larger and more significant for pollution prevention efficiencies.

The strategic implications of flexibility in manufacturing systems

Flexibility in manufacturing has aroused considerable interest among researchers and professionals. However, the vast body of literature on flexibility does not adequately address the kind of flexibility a company needs to meet its strategic objectives, nor how this flexibility can be achieved. An overview is provided of different types of flexibility, a classification scheme based on the strategic positioning and goals of the firm is provided, and suggestions are made on how these goals may be achieved. The importance of such a classification in the design and investment justification of flexible manufacturing is also discussed.

Ecological modernization in the electrical utility industry: An application of a bads–goods DEA model of ecological and technical efficiency

Newly-developed data envelopment analysis techniques permit simultaneous consideration of ‘good and bad’ outputs in evaluating efficiency. We use these techniques to determine joint ecological and technical efficiencies of the 437 largest fossil-fueled electricity-generating plants in the United States. Utilizing the EPA’s E-Grid and Clean Air Markets databases and drawing on ecological modernization theory we evaluate whether innovations in organizational practices and technological solutions help achieve joint technical and environmental performance efficiencies.

Moderators of the Relationship between Director Stock-Based Compensation and Firm Performance

Research on the efficacy of stock-based compensation for outside directors has documented a weak or non-existent relationship with firm performance. Other variables also influence the relationships between these two constructs. Consistent with agency theory, we show, for a sample of 450 Standard & Poor 500 firms over the 1995-97 period that the use of director stock options and grants ratios was more strongly associated with positive performance in firms with (a) higher investment opportunities, and (b) weaker external monitoring. These findings have implications for compensation committees in the structuring of director compensation. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Facilitating Sustainable Innovation through Collaboration

Innovation, sustainability, and collaboration are all related in their efforts to manage multiple dimensions of organizational and institutional policies and practices. This chapter provides an overview of the three topics and their relative importance to overall advancement of sustainability through innovations. Collaboration is necessary to achieve this goal and various collaborative arrangements and stakeholders in these arrangements are discussed. The chapter also introduces and discusses the various remaining chapters in this book and presents summaries, insights and linkages amongst these chapters.

Investigating technical and ecological efficiencies in the electricity generation industry: are there win-win opportunities?

Using data from the EPAs EGRID and Clean Air Markets databases, we investigate the energy (technical) and emissions (ecological) efficiencies of 437 of the largest US electricity generators. We focus on fossil-fuel-based electricity generating plants because of their significant impact on industry environmental performance, especially with respect to air media emissions. Data envelopment analysis is used to determine the relative technical and environmental performance of these plants and whether win-win opportunities and end-of-pipe versus in-process (reactive versus proactive) practices relate to these efficiencies. The results show that win-win opportunities in terms of simultaneous technical (operational) efficiency and ecological efficiency do not appear to exist.

Non‐parametric assessment of CEO compensation practices

Purpose – The purpose of this research is to present an alternative to the vast majority of studies on chief executive officer (CEO) compensation practices in the USA which have relied on multiple regression analysis and its variants.Design/methodology/approach – The paper points out the shortcomings of traditional parametric approaches (such as regression analysis) to the analysis of CEO compensation practices and suggest non‐parametric alternatives.Findings – Using tests for concurrent validity, the paper demonstrates how non‐parametric assessment may be successfully applied to the analysis of CEO compensation practices.Originality/value – Because of the novelty of this approach, the findings should be of value to those academics and practitioners interested in the evaluation of CEO compensation practices.

Chinese executive compensation: the role of asymmetric performance benchmarks

We study asymmetric performance benchmarking in Chinese executive compensation contracts between 2000 and 2010. We predict that while relative performance evaluation criteria are important in executive pay contracts, managerial power and influence will result in a decoupling between pay and performance. We predict that Chinese managers are rewarded for superior performance but not penalized for inferior performance. We test this asymmetric pay-for-performance hypothesis using three performance benchmarks: whether firm performance is positive/negative, above/below industry average, and above/below regional average. We find the sensitivity between executive compensation and firm accounting performance is asymmetric. It is significantly stronger when firm accounting performance is positive or firm performance exceeds industry or regional median benchmarks compared to cases when firm accounting performance is negative or is below industry or regional median benchmarks. We find little evidence that ownership structure and internal governance mechanisms moderate the asymmetric pay-for-performance relationship.

CEO power, equity ownership and underwriter reputation as determinants of lockup period length

Purpose – The purpose of the research is to study how Chief Executive Officer’s (CEO’s) ownership, CEO’s structural and expertise power and underwriters’ reputation affect the initial public offering (IPO) lockup period. Design/methodology/approach – The study uses the multivariate regression method to test the hypothesis on a sample of 1,071 US IPOs, which comprise 80 per cent of the total population of IPOs over the 1998-2002 period. Findings – It was found that CEO equity ownership had a direct positive impact and two indicators of CEO positional power (CEO duality, founder status) and underwriter reputation had a direct negative impact on the length of the lockup period that results from IPO negotiations between the issuing firm and the underwriter. It was also found that underwriter reputation negatively moderates the impact of equity ownership (likely due to a substitution effect) and positively moderates the impact of CEO duality on lockup period length (by offsetting the impact of CEO positional p...