Abstract
Does environmental management help foreign-invested firms outperform local firms in emerging economies? Existing research suggests that environmental management may or may not benefit firm performance, but the question is particularly under investigated in emerging economies. This study explores whether foreign-invested local firms that can access better environmental management systems outperform comparable local firms in an emerging economy. In making this comparison, we use the propensity score matching along with difference-in-differences approach to handle the endogeneity problem inherent in foreign firms¡¯ investment decisions. By using financial and environmental data from China for the period 1998-2009, we find evidence that foreign-invested firms perform better than local firms when firms are under high environmental pressure.
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