King, Andrew, and Michael Lenox. "Does it Really Pay to Be Green? Accounting for Strategy Selection in the Relationship Between Environmental and Financial Performance," Journal of Industrial Ecology. Vol. 5(1), 2001.

Uses regression analysis to examines the relationship between environmental and financial performance for 639 publicly traded U.S. manufacturing firms for the 1987-1996 time period. Financial performance was defined using a simplified version of Tobin's Q, and adjustments were made for firm size, capital intensity, R&D intensity, and financial leverage. Environmental performance was defined using two variables, one for industry emissions and one for the firm's emissions relative to its industry (data came from the EPA's Toxic Release Inventory).

Finds that both industry and relative emissions were associated with weak financial performance. Reported r2 for the primary model was 10.6%, although F statistic was highly significant (p<.001). (Includes strong review of the literature of environmental impact on financial performance through 1999).