A green image is recently an important component for corporate survivability in modern business. This study discusses a new use of DEA for environmental assessment by incorporating an analytical capability to handle zero and negative values. The proposed approach provides us with not only quantitative assessment on unified (operational and environmental) performance of firms but also information regarding how to invest for technology innovation for abating an amount of industrial pollution. This study incorporates the new analytical capability on an occurrence of zero and negative values and obtains the following empirical findings. First, as a long-term concern, the energy industry is not an attractive investment target because the industry is a very large process industry so that the green investment does not immediately increase the corporate value, as found in the other industrial sectors. Previous works can only deal with positive numbers, therefore, the unsuccessful companies are excluded. But this study pays attention to both successful companies with positive net incomes and unsuccessful companies with negative net incomes, so being within a short-term concern. This study finds that the energy firms may be not attractive in terms of a short-term horizon (i.e., net income) because governmental regulation on their operations and environment mitigations are stricter than the other industrial sectors. The energy sector needs a long-term horizon to attain a high level of corporate sustainability by investing technology innovation for pollution mitigation.
Yan Yuan, New Mexico Institute of Mining and Technology, United States
Toshiyuki Sueyoshi, New Mexico Institute of Mining and Technology, United States
Stream: Economic Sustainability: Sustainable Businesses and CSR
This paper is part of the IICSEEHawaii2017 Conference Proceedings (View)
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