Enterprises’ Emissions Intensity and Financial Performance in Serbia: The Case Study of Wastewater

Abstract

Untreated industrial and municipal wastewater is the key factor that leads to water pollution in Serbia. The aim of the paper is to examine the impact of environmental performance (using eco-intensity indicators) of enterprises on their profitability in the period 2011-2020 in Serbia in the area of wastewater. Apart from using the panel data technique in the paper, the Generalized Method of Moments (GMM) is also used to estimate the parameters in the model. The results demonstrate that if the eco-intensity indicator increases, the profitability of an enterprise increases significantly, whereas the profitability of an enterprise decreases with the increase in the size of an enterprise. According to the results of the evaluated model, the capital intensity variable has no influence on the profitability of an enterprise. Additionally, it has been determined that the coefficient with the eco-intensity indicator is quite large, indicating the poor eco-efficiency of Serbian enterprises in the area of wastewater.