Publication

This paper analyzes potential endogeneity problems in former econometric studies which regress corporate environmental performance such as green technology activities on green management. Based on evolutionary theory and the resource-based view of the firm, the authors describe how green technology could also influence green management and that unobserved firm characteristics could simultaneously influence green management and green technology. Contrary to existing studies, the authors also empirically explore the structural reverse causality hypothesis with a unique cross-sectional firm-level data set from the German manufacturing sector. The paper states that the econometric analyses with uni- and multivariate probit models imply a significantly positive effect of environmental process innovations on certified environmental management systems and a significantly positive impact of environmental product innovations on life cycle assessment activities. The authors interpret such empirical results as a further indicator that the causal relationship between green management and green technology is not clear. The paper concludes that panel data, which are not available for technological environmental innovations yet, are a necessary condition to solve endogeneity problems. The authors hence conclude that such panel data studies could therefore be an appropriate basis for robust conclusions with regard to voluntary green management measures as a non-mandatory approach in environmental policy.