Testing Environmental Kuznets Curve Hypothesis at Firm Level in India

Abstract

All over the world, deterioration of environmental quality has been considered as a hot issue. The growingnumber of industries is one of the major reasons for the enhanced level of pollution and fast degradation ofenvironmental resources. This situation urges the corporates to involve themselves in socially responsibleactivities and to periodically assess the ecofriendly technologies. This paper proposes to investigate theEnvironmental Kuznets Curve Hypothesis, with reference to sample companies listed in BSE S&P – 500, overthe period 1st April 2005 to 31st March 2014. In order to determine the existence of EKC relationship, the signand magnitude of regression coefficients were analyzed. The results exhibited U shaped relationship for ROE,ROCE, and ROS. At the same time, EKC relationship, by way of inverted U shaped curve, was found for ROA.Based on the empirical findings of this study, some suggestions have been put forward to the corporates andpolicy makers, to control the level of energy intensity, by implementing eco-friendly technologies.