3.6 Cost of labour
To be fully effective, a company must have a clear vision and
well-defined standards with ambitious goals. It would be difficult for any firm
to continue to operate if employees perceive that its products, processes and
objectives are harmful to mankind.
All point to conclusion that a better environmental
performance can reduce labour costs through lower sickness, absenteeism, staff
turnover, recruitment costs and improved productivity. Some analysts, like
Lankoski (2006), have used this argument in favour of reducing labour costs.
However, even if the argument is rather convincing, there is no direct
empirical evidence of this effect. To establish empirical evidence of cost
reductions related to a lesser degree of pollution, the dataset should reflect
the measurements of the costs of
labour, for example the rate of turnover and absenteeism, and
data on environmental performance. Intuitively, the type of companies that
could potentially cut labour costs by improving their environmental performance
would be: 1) those whose emissions may affect the health of their workers, 2)
those that seek to attract qualified workers, including scientists, engineers,
MBA and 3) those established in regions where sensitivity to environmental
concerns is more pronounced (Lanoie, et al., 2007). The last hypothesis of the
subsequent econometric model will be as follows:
H6: The eco-innovative firms will increase their return on
sales by both reducing their labour costs and increasing their productivity as
their employees as they are committed, compared to their competitors.
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