Ecoefficiency and firm profitability nexus: the case of Serbia

Stevanović, Slavica and Minović, Jelena and Hanić, Aida (2023) Ecoefficiency and firm profitability nexus: the case of Serbia. Fresenius environmental bulletin, 32 (3). pp. 1196-1201. ISSN 1018-4619

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Abstract

To achieve sustainable development, eco-effi-ciency can be used as the main tool that will enable firms to create more by using fewer resources result-ing with less waste and pollution. In that aspect, this paper aims to investigate the relationship between eco-efficiency and firm profitability from 2011 to 2020 in Serbia as a high fossil fuel-reliant economy. To test the relationship between eco-efficiency and firm profitability, we used the panel technique, and we applied the Generalized Method of Moments (GMM) for estimation. The analysis showed that the highest eco-efficiency indicator in Serbia was rec-orded in 2015, which means that Serbia had the high-est overall air emissions that year. Our main results show that the eco-efficiency variable impacts the profitability of Serbian polluting firms. Additionally, our model suggests that the size variable has a sig-nificant negative impact on firms' profitability; the investment level variable influences profitability positively, but the capital intensity variable has no impact on firms' profitability.

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