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The Eco‑Management and Audit Scheme (EMAS) environmental certification and its impact on agricultural companies? financial performance.

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Authors: J.A. Cavero‑Rubio y A. Amorós‑Martínez
Issue: 113-3 (287-305)
Topic: Agricultural Economics
Keywords: Agricultural sector, employee performance, financial performance, environmental management system (EMS)

There is an increasing demand for environmental management in the agricultural sector, and certification of environmental management systems by external bodies according to international standards has spread in recent decades. Certification implies having an environmental system whereby negative external impacts are reduced and environmental performance is improved. However, although certification positively affects the internal functioning of organizations, little attention has been given to this aspect, and consequently little evidence has been obtained to sustain this assertion in agricultural companies. For this reason, the aim of this paper is to study whether there is a positive relation between certification and financial performance in agricultural companies depending on the sector, crisis and internationalization. On the one hand, an analysis is made of the ratios linked to organization: return on assets, return on equity, operating profit margin, asset turnover and sales growth. On the other hand, an analysis is made of human resources ratios: operating income per employee and employee economic margin. To do so, we have studied large Spanish agricultural firms with and without Eco‑Management and Audit Scheme certification in the 2005‑2014 period. The application of univariate statistical techniques has determined that almost all ratios for agricultural companies with EMAS certification are better, for all companies and sectors, for internationalization and in times of crisis. A multivariate study has shown that return on equity, employee economic margin, asset turnover, size, sector, crisis and internationalization are related to the EMAS certification.

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