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This study carefully explores how the established relationship among environmental performance, environmental strategy, and financial performance matters across heterogeneously performing groups. For this purpose, we employ a sample of companies operating in heavy polluting industries in the United States from 1991 to 2005. The result showed that the relationship between these variables definitely varies across different levels of environmentally performing groups, such as best, moderate, and worst performing, suggesting that strategic decision makers and public policymakers alike need to be careful not to make easy conclusions: proactive (reactive) environmental strategy leads to better (poorer) environmental performance, and doing well necessarily results in doing good.

How Does Environmental Performance Matter Across Heterogeneously Performing Groups?