A RESOURCE-BASED PERSPECTIVE ON CORPORATE ENVIRONMENTAL PERFORMANCE AND PROFITABILITY

Drawing on the resource-based view of the firm, we posited that enviro nmental performance and economic performance are positively linked and that industry growth moderates the relationship, with the returns to environmental performance higher ire high-growth industries, We tested these hypotheses with an analysis of 243 firms over two years, using independently developed environmental, ratings. Results indicate that ''it pays to he green'' and that this relationship strengthens with in dustry growth. Mle conclude by highlighting the study's academic and m anagerial implications, making special reference to the social issues in management literature.