Is there a trade‐off between environmental performance and financial resilience? International evidence from the subprime crisis

Companies face mounting pressure to be environmentally conscious, yet they simultanously have to cope with more frequent financial crises. Whether environmental performance (EP) improves or mitigates the resilience of a firm when confronted with a financial shock is then of particular importance. Our survival analysis shows that high pre‐crisis EP significantly increased the time of firms’ market price recovery after the subprime crisis. This result suggests that EP appears as an organisational constraint that may limit the ability of firms to be financially resilient. However, in less environmentally oriented countries, EP does not negatively influence a firm’s financial resilience.