Financial benefits from corporate announced practice of industrial waste recycling: Empirical evidence from chemical industry in China

This paper empirically examines the relationship between corporate financial performance and adoption of industrial waste recycling in Chinese chemical industry. We employ an event study methodology with the application of propensity score matching to establish the comparison group for our analyses. The result shows that corporate internal operating characteristics such as cost intensity and asset turnover, rather than environmental management experience, are key determinants of industrial waste recycling adoption. Reputation effect from industrial waste recycling adoption is significant as evidenced with an increase of sales growth at the adoption year from our data analyses. However, the reputation effect lapses without significant change after the adoption year. There is a lack of performance effect of industrial waste recycling adoption with corporate cost saving and profitability for Chinese chemical industries to enhance their competency in these performance parameters.