Cozy Politics on Environmental and Financial Performance: Evidence from Oil and Gas companies

Nur Farrahanie, Ahmad Tarmizi and Rayenda Khresna, Brahmana (2022) Cozy Politics on Environmental and Financial Performance: Evidence from Oil and Gas companies. Malaysian Journal of Social Sciences and Humanities (MJSSH), 7 (6). pp. 1-17. ISSN 2504-8562

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Abstract

This is a conceptual paper of a future study based on the review of literatures related to environmental and firm performance. Political connections have been identified as a source of competitive advantage and a tool for resolving corporate environment and financial issues in various studies. Because the environment is extremely unpredictable, organisations go to great lengths to guarantee pollution is under control. As a result, several actions are being carried out to keep stakeholders satisfied and investors confident. However, more cost on environment will cause firm financial instability. Having politicians on the board aids company success and allows it to surpass other competitors. The objective of this study is to examine for imminent research whether political connections able moderate the relationship between environmental and firm financial performance among oil and gas companies extracted via Global Fortune 500 Companies. The paper went on to analyse the issues, concept and objectives for the forthcoming study through several literatures of various discipline. The result of this future research may provide information to companies on how political connections can assist companies in order to maintain environment and financial stake simultaneously. It will also be valuable to policy-makers to promote green environment and excellent corporate return. Given that many oil and gas companies have clear link to political ties, the environment and financial performance would prosper. This study is significant in that it suggests that political connections are associated with improved environmental performance and financial performance.

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