Environmental Clean-Up Costs and the Financial Performance of Plastic Companies in Douala
Abstract
In light of the on-going debates about the widely debated trade-off between environmental responsibility and financial performance of companies, this study was conducted to investigate the relationship between environmental clean-up costs and the financial performance of plastic manufacturing companies in Douala. An ex-post facto research design was employed and the analysis based on 40 firm-year observations from 2016 to 2023. The data analysis was conducted using the Ordinary Least Square technique applied to the pooled panel data. The empirical evidence disclosed that the direct financial burden of environmental clean-up costs does not significantly impair the overall profitability of the company. Secondly, the key drivers of financial success in the plastic manufacturing companies appear to be the firm size and the operational efficiencies associated with it rather than environmental clean-up costs. Thirdly, most successful firms are the larger ones that have likely integrated more efficient processes, leading simultaneously to better financial outcomes and a reduced need for reactive environmental clean-up cost spending. Based on these findings the policy recommendations are that: plastic manufacturing concerns should prioritize investments in operational efficiency, modern production technologies, and waste minimization processes; the government should institute a policy approach that supports and enables firms to modernize by creating incentive structures such as tax credits or grants that encourage firms of all sizes to invest in cleaner production technologies.
Copyright (c) 2026 Mukah Samuel Tanjeh
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