Environmental investments: Too much of a good thing?

Using an original and large database on more than 6000 French firms over a 5 years period we add empirical evidence regarding the effect of environmental investments on economic performance, measured by firms' net profits. We apply a fixed-effects model at the firm year level which controls for unobserved heterogeneity. We show that this effect follows an almost U-inverted curve, implying that there is an optimal level of environmental...