Effects of Green Technology on Firms' Profitability and Solvency: A Study on Textiles Industry of Bangladesh
DOI:
https://doi.org/10.18034/abr.v10i2.472Keywords:
Green Technology, Financial benefit, ROS, ROA, ROE, Debt asset, Debt equity, Environmental effects, Textiles IndustryAbstract
In recent years there has been increasing advocacy regarding the perception that turning green is good for the corporation and thus for the whole economy. Green technology is nowadays a popular term in any industry but the stakeholders always ask a question of whether the company benefits from using green technology or is there any financial gain? This question remains unanswered in our country, and because of that new entities are not willing to adopt green technology especially in the textile sector. This paper shows that the companies using green technology having financial benefits than the companies not using green technology. In this paper, we used financial performance measurement techniques to find out companies' financial health. This study has taken data of 43 listed companies of Dhaka Stock Exchange. Then it divides the data into two groups, a group accustomed to green technology and a group not accustomed to green technology. Firstly, we used profitability ratios (ROS, ROA, ROE) to find out two groups of companies' position. Profitability ratios vary significantly from one group to another. Secondly, we used solvency ratios (Debt asset ratio and debt-equity ratio) and find result almost similar but the result changes with the passages of time through the payment of installment. So from the study, it can be said that profitability is positively related to the adoption of green technology. Thus, by studying this paper company will be keen to adopt green technology in their organization. This paper will also help existing companies to improve the existing technology.
Downloads
References
Banerjee, S.; Akuli R.K. (2014). “Advantages of green technology”. Recent Research in science and technology, 6(1): 97-100.
Bhardwaj, M. and Neelam (2015). "The Advantages and Disadvantages of Green Technology" Journal of Basic and Applied Engineering Research, Volume 2, Issue 22; October-December,: pp. 1957-1960.
Brown, L. R., and Mitchell, J. (1999). Building a New Economy. In W M. V. Russo, Environmental Management Readings and Cases, (1999). pp. 15-32.
Cainelli, G.; Maichi, V.D.; Grandinetti, R. (2015). Does the development of environmental innovation require different resources? Evidence from Spanish manufacturing firms. J. Clean. Prod. 94, 211–220. https://doi.org/10.1016/j.jclepro.2015.02.008
Chen, Y. S., Lai, S. B. and Wen, C. T. (2006). ‘The Influence of Green Innovation Performance on Corporate Advantage in Taiwan’, Journal of Business Ethics, 67(4), 331–339.
Dangelico, R.M.; Pontrandolfo, P. (2015). Being “green and competitive”: The impact of environmental actions and collaborations on firm performance. Bus. Strateg. Environ. 2015, 24, 413–430.
Esty, D. C., and Winston, A.S. (2006). Green to Gold: How Smart Companies use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. New Haven: Yale UP.
Fraj-Andrés, E., Martinez-Salinas, E. and Matute-Vallejo, J. (2009). A Multidimensional Approach to the Influence of Environmental Marketing and Orientation on the Firm’s Organizational Performance. J Bus Ethics, 88, 263. https://doi.org/10.1007/s10551-008-9962-2
Hart, S. L. (1997), Beyond Greening: Strategies for a Sustainable World. Harvard Business Review,) 75(1), 66-76.
Marchi, V. (2012). Environmental innovation and R&D cooperation: Empirical evidence from Spanish manufacturing firms. Res. Policy, 41, 614–623.
Menanteau, P. (2003). "Prices vs. Quantities: Choosing Policies for Promoting the Development of Renewable Energy." Energy Policy 31.8: 799-812.
Miles, M. P. and J. G. Covin (2000). ‘Environmental Marketing: A Source of Reputational, Competitive, and Financial Advantage’, Journal of Business Ethics 23(3), 299–311.
Miles, M. P., and Munilla, L. S. (1993). The eco-orientation: an emerging business philosophy? Journal of Marketing Theory and Practice, 43-51.
Mitchell, R.; Agle, B.; Wood, D. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Acad. Manag. Rev. 22, 853–886.
Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring Organizational Performance: Towards Methodological Best Practice. Journal of Management, 35(3), 718–804. https://doi.org/10.1177/0149206308330560
Willard, B. (2012). The New Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. Gabriola Island, B.C.: New Society.
--0--
Published
How to Cite
Issue
Section
License
Asian Business Review is an Open Access journal. Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal the right of first publication with the work simultaneously licensed under a CC BY-NC 4.0 International License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of their work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal. We require authors to inform us of any instances of re-publication.
