Environmental Management Resources and firm Value: Empirical evidence from Japanese listed manufacturing firms (Japanese)

This paper examines whether environmental related investment increases firm value by using the firm level panel data of the Survey of Research and Development, Development Bank of Japan Kigyo Zaimu Data Bank, and CSR Kigyo Soran. In the standard theory of the firm, environmental related investment does not increase firms' profits, but in recent research, it is shown that it could increase firm value in view of the benefits enjoyed by various stakeholders. Regarding the accumulation of investments as a valuable management resource, this paper considers the influence of environmental related investment accumulation on firm value. We test the relationship between research and development investment for environmental technology and investments for environmental protection and Tobin's q, return on assets (ROA), and return on equity (ROE). The estimation results show that environmental related investment increases firm value, and leads to accumulation of useful management resources. In addition, our results indicate that the combination of environmental related investment and active advertisement raises firm value.