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Eco-labeling and sustainability: A case of textile industry in Pakistan
برچسب زدن به محیط زیست و پایداری: موردی از صنعت نساجی در پاکستان-2020 Industrial pollution is a big concern in many manufacturing sectors including textile sector. Recently,
voluntary actions for environmental protection have gained their importance. Eco-labeling is one of the
most important schemes of voluntary environmental actions and has been recognized as an effective
measure to reduce industrial pollution. This paper analyzes the effect of eco-labels on the textile firms’
environmental and financial performance. Three stage least squares regression is applied using data from
128 firms listed in Pakistan Stock Exchange. Results reveal that eco-labels have a significant positive
effect on textile firms’ environmental and financial performance. This indicates that eco-labels promote
the sustainable growth of textile firms. Furthermore, financial performance, material cost, and age have a
significant positive effect on the environmental performance of textile firms whereas machinery and size
have a significant negative effect on the environmental performance. Likewise, debt-equity ratio and size
of the firm have a significant positive effect on the financial performance of the textile firms wheras the
environmental performance, machinery, and age of the firms have a significant negative effect on the
financial performance Keywords: Eco-labeling | Sustainability | Environment-friendly products | Pakistan textile firms | Simultaneous equations | Three stage least square method |
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