Resource‐efficiency actions and financial performance: Exploring the moderating role of production cost.

This study employs the Porter hypothesis framework to test the moderating role of production cost in the relationship between resource‐efficiency actions and financial performance for German small and medium‐sized enterprises (SMEs). For this purpose, we employ the 2012, 2018, and 2021 Flash Eurobarometer surveys to analyze how consistently SMEs adopt resource‐efficiency actions, and the impact of these actions on their performance and costs. We also conduct a generalized method of moments regression analysis (GMM). Among the seven resource‐efficiency actions proposed, saving water had a significant positive (negative) influence on financial performance in 2012, 2021, and (2018). Saving energy and using renewable energy had a positive and significant (insignificant) effect on financial performance in 2018, 2021, and (2012). Finally, selling scrap material to other companies had a positive and significant impact in all years. Furthermore, increased production costs negatively moderate the relationship between eco‐efficiency action scores and financial performance. The results indicate that the "strong" version of the Porter hypothesis is not supported: It only holds when the implementation of eco‐efficiency actions reduces production costs and increases financial performance. [ABSTRACT FROM AUTHOR]