The impact of corporate environmental responsibility on family firms financial performance

In light of the current climate change scenario, and related physical and transition risks, the present study responds to the need for deeper empirical investigations on the relationship between Corporate Environmental Responsibility (CER) and Corporate Financial Performance (CFP) under specific organizational settings such as the one of Family Firms (FFs). In particular, the study investigates to what extent the engagement in environmentally friendly processes and activities might lead FFs to better balance socioemotional wealth (SEW) with long-term financial stability. To address this research questions, the current study relies on an international sample of 335 FFs, observed from 2009 to 2020. As a whole, results from fixed effect panel regressions analysis indicate a positive impact of the CER on both accounting and financial-based measures of CFP. Accordingly, results from this study suggest that FFs orientation towards CER can generate better conditions for these organizations in preserving the SEW, while pursuing competitiveness and better corporate performance. These findings are relevant for both FFs and the global community, given the prominent role that these organizations play in the current economic scenario.