The CERE working paper written by Tommy Lundgren and Per-Olov Marklund with the title "Environmental Performance and Profits" was ranked no.5 on the top 10 most downloaded papers' list according to the Social Science Research Network website during the period February 16th to April 16th. Read more about it below. "Determinants of Environmental Expenditure and Investment: Evidence from Sweden" held the 6th place, see the paper here.

Tommy Lundgren and Per-Olov Marklund formulated discussions in this paper around the issues of measurement on firm level environmental performance (EP) and economic performance which is interpreted in terms of profit efficiency (PE); as well as investigated the effects of policy (specified as CO2 tax) and non-policy (other exogenous factors such as energy prices, environmental friendly business behaviors etc.) induced EP on PE within the Swedish manufacturing sector from 1990-2004.

The main result is that EP induced by environmental policy is not a determinant for PE; while non-policy induced EP seems to have positive effects on PE in the Swedish Manufacturing sector. This conclusion somehow challenges Porter's Hypothesis and recent findings in Japanese industry. However, it is consistent with numerous other empirical studies which demonstrate there is a positive relationship between financial performance and environmental performance.

Another contribution from this paper is that the authors separated measurement of EP into two parts: policy induced and non-policy induced EP index. This approach therefore allows them to consider the whole chain from the impact of CO2 taxation on firms' EP to the impact of EP on firms' PE.

In summary, their findings are helpful in explaining the relationship between EP and PE as well as separating the measurement of EP into policy induced and non-policy induced. Moreover, they raise interesting questions in the end of the paper such as the study of causal relationship between EP and PE for future research.