The impact of external and internal drivers on value creation

Gernot  Gruber

doi:10.23762/FSO_VOL9_NO2_2

Published : 2021-06-30

Vol. 9 No. 2 (2021)

The impact of external and internal drivers on value creation

Gernot Gruber

https://orcid.org/0000-0002-4727-0863

DOI: https://doi.org/10.23762/FSO_VOL9_NO2_2

Abstract

Protecting the environment and climate change are the main talking points in the modern world. This leads to increasing political involvement in the matter. This circumstance, as well as changing macroeconomic parameters, are the background to the investigation undertaken in this paper. The main objective of the paper is to evaluate the impact of value drivers on company value and the relationship between them. Based on the research questions, an identification and quantification of internal drivers of company value constitutes the first step. Analysis 1 is done by means of a multiple linear regression analysis. In the second step, these examined internal drivers are used in an investigation to verify and quantify the influence of external drivers (GDP, environmental tax and the Fraser index). Analysis 2 is done via a specific structural equation model (path analysis). Data in this paper are drawn from selected industrial sectors (metal, paper, and chemical) of three European countries (France, Germany, and Italy) within the period of 2006-2015. The findings show that size and profit margin are the most relevant internal drivers. GDP is the most relevant external driver with an impact on internal drivers. GDP always has a positive impact on added value. The results also indicate that the impact of GDP is higher in periods of economic crisis. Another outcome of the paper is that only in France do the environmental tax and the Fraser index have a clear impact on added value.

Keywords:

Added value, value driver, regression analysis, path analysis

Details

References

Statistics

Authors

Download files

PDF

Citation rules

Gruber, G. (2021). The impact of external and internal drivers on value creation. Forum Scientiae Oeconomia, 9(2), 23–45. https://doi.org/10.23762/FSO_VOL9_NO2_2

Altmetric indicators

Cited by / Share

References

Albertini, E. (2013), Does Environmental Management Improve Financial Performance? A Meta-Analytical Review, Journal of Organization & Environment, 26(4), 431-457, https://doi.org/10.1177/1086026613510301

Al-Najjar, B., Anfimiadou, A. (2012), Environmental Policies and Firm Value, Journal of Business Strategy and the Environment, 21(1), 49-59. https://doi.org/10.1002/bse.713

Chittedi, K. (2015), Macroeconomic Variables impact on Stock Prices in a BRIC Stock Markets: An Empirical Analysis, Journal of Stock & Forex Trading, 4(2), 1-7. https://doi.org/10.4172/21689458.1000153

Civelek, M. (2018), Essentials of structural Modelling. Lincoln: Zea Books.

Cutler, D., Poterba, J., Summers, L.H. (1991), Speculative dynamics, Review of Economic Studies, 58(3), 529-547. https://doi.org/10.2307/2298010

Dang, T., Wang, Y., Wang, Z. (2019), The Effects of Mandatory Pollution Abatementon Corporate Investment and Performance: Theory and Evidence from a U.S. Regulation, in: Financial Management Association European Conference, June 2019. https://doi.org/10.2139/ssrn.3257675

Dowell, G., Hart, S., Yeung, B., (2000), Do corporate global environmental standards create or destroy market value? Journal of Management Science, 46(8), 1059-1074. https://doi.org/10.1287/mnsc.46.8.1059.12030

Eurostat (2015), Greenhouse gas emissions by source sector (source: EEA), retrieved from: https://ec.europa.eu/eurostat/web/products-datasets/-/env_air_gge (accessed 20 April 2021).

Eurostat (2021), Implicit tax rate on energy, retrieved from: https://ec.europa.eu/eurostat/ databrowser/view/TEN00120/default/table?lang=en (accessed 10 March 2021)

Fraser Institute (2021), Economic freedom rankings, retrieved from: https://www.fraserinstitute.org/economicfreedom/dataset?geozone=world&year=2017&page=dataset&min-year=2&max-year=0&filter=0 (accessed 10 March 2021)

Fuchs, A. (2011), Methodische Aspekte linearer Strukturgleichungsmodelle Ein Vergleich von kovarianz- und varianzbasierten Kausalanalyseverfahren, Research Papers on Marketing Strategy No. 2 / 2011, University of Würzburg. (Original work published in German).

Gongeta, S. (2018), Impact of economic crisis on business regulation reforms, International Entrepreneurship Review, 4(3), 167-176.

Herwadkar, S. (2017), Corporate leverage in EMEs: Did the global financial crisis change the determinants? BIS working papers no. 681.

Hiroki I., Keisuke O. (2011). How does environmental performance affect financial performance? Evidence from Japanese Manufacturing firms, Journal of Ecological Economics, 70(9), 1691-1700. https://doi.org/10.1016/j.ecolecon.2011.05.010

Hussain, H., Kot, S., Thaker, H., Turner, J. (2020), Environmental reporting and speed of adjustment to target leverage: Evidence from a dynamic regime switching model, Organizacija, 53(1), 21-35. https://doi.org/10.2478/orga-2020-0002

Kaszowska-Mojsa, J. (2020), Innovation strategies of manufacturing companies during expansions and slowdowns, Entrepreneurial Business and Economics Review, 8(4), 47-66. https://doi.org/10.15678/EBER.2020.080403

Khalid A., Wei L. (2012), Environmental Kuznets Curve and Pakistan: An Empirical Analysis, Procedia Economics and Finance, 1, 4-13. https://doi.org/10.1016/S2212-5671(12)00003-2

Kitrar, L., Lipkind, T. (2021), The relationship of economic sentiment and GDP growth in Russia in light of the Covid-19 crisis, Entrepreneurial Business and Economics Review, 9(1), 7-29. https://doi.org/10.15678/EBER.2021.090101

Krüger, Ph. (2015), Climate Change and Firm Valuation: Evidence from a Quasi-Natural Experiment, Swiss Finance Institute Research Paper No. 15/40, 1-59.https://doi.org/10.2139/ssrn.2565523

Lee, C-C., Chen, M-P., Ning, S-L. (2017), Why did some firms perform better in the global financial crisis? Economic Research– Ekonomska Istraživanja, 30(1), 1339-1366. ht tps://doi.org/10.1080/1331677X.2017.1355258

Lopez-Gamero, M., Molina-Azorin, J.,Claver-Cortes, E., (2009), The whole relationship between environmental variables and firm performance: Competitive advantage and firm resources as mediator variables, Journal of Environmental Management, 90(10), 3110-3121. h t tp s: / /d o i .o rg / 10 .1016 / j . j e n vma n .2009.05.007

Madaleno, M., Barbuta-Misu, N. (2019), The financial performance of European companies: Explanatory factors in the context of economic crisis, Ekonomica,98(2), 6-18. https://doi.org/10.15388/Ekon.2019.2.1

Maric, M., Znidarsic, J., Uhan, M., Dimovski, V., Ferjan, M., Djurica, M., Jeraj, M., Janezic, M. (2013). Country’s development as a determinant of early-stage entrepreneurial activity. Organizacija, 46(3), 75-86. https://doi.org/10.2478/orga-2013-0011

Matsumara, E., Prakash, R., Vera-Munoz, S. (2014), Firm-Value Effects of Carbon Emissions and Carbon Disclosures, The Accounting review, 89(2), 695-724. https://doi.org/10.2139/ssrn.1921809

Mnif, W., Davison, M. (2012), EU ETS Futures Spread Analysis and Pricing Contingent Claims Under Different Market Schemes, University of Western Ontario, 1-38. https://dx.doi.org/10.2139/ssrn.2159949

Mocnik, D. (2010), The impact of economic growth on the dynamics of enterprises: Empirical evidence for Slovenia’s nonagricultural sector, Organizacija, 43(4), 154-164. https://doi.org/ 10.2478/v10051-010-0015-0

OECD (2021), Real GDP forecast, retrieved from:https://data.oecd.org/gdp/realgdp-forecast.htm (accessed 10 March 2021)

Oxelheim, L., Wihlborg, C. (2001), Recognizing Macroeconomic Fluctuations in value-based management, Journal of Applied Corporate Finance, 15(4), 104-110. https://doi.org/10.1111/j.17456622.2003.tb00531.x

Palmer, K., Oates, W.E., Portey, P.R. (1995), Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm? Journal of Economic Perspectives, 9(4), 119-132. https://doi.org/10.1257/jep.9.4.119

Porter, M., van der Linde, C. (1995 a), Green and competitive: Ending the stalemate, Harvard Business Review, 73(5), 120- -134. https://doi.org/10.1016/0024-6301(95)99997-e

Porter, M.E., van der Linde, C. (1995 b), Toward a new conception of the environment- competitiveness relationship, Journal of Economic Perspectives, 9(4), 97-118. https://doi.org/10.1257/jep.9.4.97

Walker, W.R. (2011), Environmental Regulation and Labour Reallocation: Evidence from the Clean Air Act, American Economic Review, 101(3), 442-447. https://doi.org/10.1257/aer.101.3.442

Walker, W.R. (2013), The Transitional Costs of Sectoral Reallocation: Evidence from the Clean Air Act and the Workforce, The Quarterly Journal of Economics, 128(4),1787-1835. https://doi.org/10.1093/qje/qjt022

World Bank (2021), GDP growth (annual%), retrieved from: https://data.worldbank. org/indicator/ny.gdp.mktp.kd.zg(accessed 10 March 2021)

Gernot Gruber

xgruber1@node.mendelu.cz
https://orcid.org/0000-0002-4727-0863

Affiliation:

Mendel University in Brno Czechia

Bio Statement (e.g., department and rank)

Gernot Gruber is a PhD student at Mendel University, Faculty of Business and Economics, where he is participating in a PhD programme in Economics and Management.

The impact of external and internal drivers on value creation

Gernot Gruber

Abstract

Keywords:

Gernot Gruber

Make a Submission