African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4164

Full Length Research Paper

Financial performance in Taiwan’s ISO14001 environmental management systems (EMS)

Yu-Ling Lin1* and Tzu-Yar Liu2  
1Department of Business Administration, National Chin-Yi University of Technology, No. 35, Lane 215, Sec.1, Chung-Shan Road, Taiping City, Taichung County 411, Taiwan. 2Energy and Environmental Research Laboratories, Industrial Technology Research Institute, Taiwan.  
Email: [email protected], [email protected]

  •  Accepted: 15 June 2011
  •  Published: 30 September 2011


Numerous empirical studies have examined how voluntary environmental adoption and financial performance are related in enterprises from industrialized countries; little attention has been paid to Taiwanese enterprises. This work empirically explores how ISO14001 environmental management systems (EMS) influences the financial performance of Taiwan Stock Exchange (TSE) and over the counter (OTC) listed adopted companies in Taiwan. Based on a sample of 369 ISO14001 certified firms and 706 non-certified firms, the regression results showed that firm age and scale influence firm decisions regarding whether to acquire ISO14001 certification. Measures of profitability, productivity and Research and Development (R and D) competence do not indicate any significant differences between ISO14001 certified and non-certified companies in terms of their financial performance. Since the institutional forces such as greening supply chain pressures have become the major driver of the moves of Taiwanese firms towards more environmentally responsible operations, the estimation results demonstrate that Taiwanese firms regard the ISO14001 standard as an acceptable means of seeking legitimacy, establishing trust and long-term relationships with a wide range of stakeholders, and deflecting the scrutiny and interest of watchdog agencies and other interested parties worldwide; thus, no significant correlation exists between environmental and financial performance.


Key words: Certification, environmental performance, financial performance, greening supply chain, ISO14001.